Bankruptcy and Foreclosure

: Reese Baker & Associates

  Filed under: Foreclosure

If you are more than two months behind in your mortgage payments, you may be worrying that the foreclosure process will begin soon. Your lender has the right to take back the collateral if you stop making payments. 

On your first missed payment, you may receive a friendly letter reminding you to pay. On your second missed payment, you might receive a sterner letter with an added late fee attached to your payment. On the third missed payment, you will probably receive a certified letter informing you that the foreclosure process is about to begin. 

If you wish to remain in your home but are unable to find the financing to catch up on the late payments, you may want to consider filing bankruptcy. Bankruptcy will halt the foreclosure proceedings by utilizing the automatic stay.

Automatic Stay

The automatic stay is enforced as soon as you file your bankruptcy paperwork with the court. The court will notify your creditors that all collection attempts must be halted. All phone calls, letters, and any legal action being taken against you must stop. Bankruptcy gives you time and the resources to catch up on your debt. 

Chapter 13

Chapter 13 is considered a reorganization bankruptcy. You do not lose any assets with this type of bankruptcy. The court will approve a repayment plan of three to five years to catch up on your back debt. At the end of the payment period, all qualifying debt remaining will be eliminated. If you wish to continue to use the collateral of your secured debt, you will need to continue to make your home and car payments. 

If you are worried you are about to lose your home, contact a McAllen bankruptcy attorney to find out how you can save your home and get financial relief.