Bankruptcy is a powerful legal tool that can help you regain control of an overwhelming financial situation. Many people who are struggling financially have fallen behind on their mortgage payments and may be facing a foreclosure action from their lender. While bankruptcy will not wipe out the balance of your mortgage loan like it can for credit card balances, medical bills, and similar debts, bankruptcy can help you overcome foreclosure and keep your home in many situations.
Halting Foreclosure Actions
As soon as you file for bankruptcy, a court order goes into effect called an “automatic stay.” This automatic stay halts all attempts to collect debts by creditors, which includes foreclosure actions by mortgage lenders. This will at least buy you some time to get your finances organized and you will know you can stay in your home while the stay is in place.
Helping with Arrears
If you file for Chapter 13 bankruptcy, you will be able to take the arrears you owe on your mortgage and include that debt in your debt reorganization and payment plan. This means you will only have to worry about making your current mortgage payments and the single payment to the bankruptcy trustee, which can be more manageable than worrying about past-due payments and fees.
Freeing Up Money to Pay Your Mortgage
In both Chapter 7 and Chapter 13 bankruptcy, you will likely receive a discharge of a significant amount of debt. Not having further obligations toward these creditors can free up a significant amount of money so that you can stay on top of your mortgage payments in the future. These are only a few of the ways that bankruptcy can help you stop a foreclosure and keep your home.
Contact a St. Petersburg Bankruptcy Attorney for More Information
Bankruptcy can be confusing and it is important to learn about all of the possible benefits and drawbacks and to select the type of bankruptcy that will best help your situation. At the law office of Berkowitz & Myer, our St. Petersburg bankruptcy lawyers will advise you on your best options and guide you through the process. Please call our office for a free consultation at 727-344-0123.