Do you want to save your house from foreclosure or do you just need to delay foreclosure a little longer? Bankruptcy is the solution.
Chapter 7 Delays Foreclosure
Typically, a chapter 7 bankruptcy will delay foreclosure for about 90 – 120 days. A chapter 7 bankruptcy lasts for approximately 90 days from the date of filing to the date of discharge. If the bank wants to restart foreclosure during that time period, they must get relief from the automatic stay.
If there have been several continuances on the foreclosure already the bank may try to keep the foreclosure on track during your bankruptcy, but even then the bankruptcy will give you a minimum of approximately 50 days before you are required to move out of your house. However, a 50 day delay is at the low end of the range, based on my experience with clients using chapter 7 to delay foreclosure.
Remember that banks and their attorneys have many many foreclosures happening at once and don’t have the time, resources, or inclination to address your case the moment they get the notice of bankruptcy filing. This means that even if the bank asks for permission to foreclose, you can usually expect a minimum of about 90 days before you have to move. It is possible for the foreclosure to be delayed for as much as 180 days.
Chapter 13 Bankruptcy Stops Foreclosure
Chapter 13 bankruptcy can save your house from foreclosure. If you have missed mortgage payments due to unemployment, illness, or just bad luck, then chapter 13 allows you to get caught up again. When you have several different creditors, plus a late mortgage, it can be very hard to get caught up without the help of a chapter 13 bankruptcy. This is because all of your creditors want to get paid in full immediately or else. A chapter 13 forces your creditors to stop their collection actions and get in line. You can get caught up on your mortgage and get rid of your other creditors with a single monthly payment.
You probably have other debts, besides your mortgage. If you have credit card debt, medical bills, or other unsecured debt, those payments will make it difficult to get caught up on your mortgage. Basically, the credit card company doesn’t care if you lose your house, they want to get paid back first. Chapter 13 puts a stop to that. When you do a chapter 13 bankruptcy, the unsecured debts get paid last; and then, they only get what’s left over after everyone else is paid. This means that you can save your house from foreclosure and get rid of your unsecured creditors.
If you don’t file a chapter 13 bankruptcy, the bank could demand that you get caught up in as little as 90 days. When you file a chapter 13 bankruptcy the automatic stay stops the foreclosure, while you get your payment plan confirmed by the court. The chapter 13 plan will provide for the curing of your default over 36 to 60 months. The bank has to accept the payment schedule in the plan. This gives you plenty of time to get current.
Don’t Delay – Get Help As Early As Possible
If you want to delay a foreclosure or stop a foreclosure entirely, you must file bankruptcy before the trustee sale date. Foreclosures are held on Friday mornings. I can file your bankruptcy as little as five minutes before the foreclosure sale and still stop the sale.
However, it is much easier and much less stressful if you talk to a bankruptcy lawyer as soon as possible. I know that filing bankruptcy is a tough decision; however, I try to make the process as easy and as affordable as possible. One way to reduce stress is to take advantage of a free consultation as early as possible.