If you find yourself facing foreclosure on your home in Hackettstown, then people may begin to advise you that filing for personal bankruptcy is the easiest way to ensure that you keep it. Several of those that we members of our team here at Jonathan Stone Attorney at Law have worked with in the past have been given similar advice, only to later discover that bankruptcy is not the automatic answer to foreclosure that it has been made out to be. Before you make this decision, it is important that you understand exactly how bankruptcy can affect foreclosure.
As you contemplate your bankruptcy options, you may immediately be drawn to the appeal of a Chapter 7 case. This allows you to have eligible debts completely discharged (which is why it tends to be the more popular personal bankruptcy option). Yet when it comes to stopping your home from being foreclosed, it might not work. If your mortgage lender has already initiated a foreclosure sale, all a Chapter 7 does is the delay the sale with its automatic stay. Once your case is discharged four to six months later, you will still be facing foreclosure. Your lender can also petition the court to lift the stay in its case to allow the sale to go through.
A Chapter 13 bankruptcy might be the better option if you want to keep your home. Per the Administrative Office of the U.S. Courts, it allows you to include your mortgage arrears in your debt repayment plan, allowing you to settle them over the three to five years you are given. All you need to do then is to stay current on your mortgage payments going forward, and your lender cannot foreclose.
More information on successfully navigating your way through bankruptcy can be found here on our site.