The SmarTroop Blog

Bankruptcy is a legal action filed by a person who cannot pay his debt as agreed. If the consumer is in bankruptcy then all the civil legal proceedings associated with the mortgage will be stopped. Therefore, legally, a home loan lender must stop every collection action, including foreclosure. But, a lender can apply for relief from the mandatory stay, and once it is allowed, can go on with the aforementioned process. Filing for Bankruptcy will not stop foreclosure and you must still repay your mortgage. Bankruptcy does not resolve the underlying problem, it just makes the foreclosure proceedings continue more slowly.

Sometimes individuals need to choose between filing financial insolvency or permitting their mortgage lender to foreclose their house. If monthly house payments are not made as scheduled, the bank will likely file a foreclosure on the property. Nothing shy of making payments for the mortgage on schedule is guaranteed stop the foreclosure process. Mortgage loans are very much like car loans, if you can not make your monthly payments you will get it repossessed. Foreclosure will be same for anyone who has not paid their mortgage, the home loan lender can start foreclosure proceedings.

Although bankruptcy will not permanently halt a foreclosure, it could give an individual enough time to repay the past due portion or at a minimum makes it bit more accessible to repay the home loan lender. the insolvency process requires a mortgage lender to put a hold on a foreclosure action, a debtor will have a short time to raise the money to pay the creditor. The final option for any debtor to file for financial insolvency when the home owner is completely unable to pay their creditor’s commitments. Under bankruptcy, some non-secured debts will in all probability be discharged but the real estate loan will not be cleared. The borrower has to be ready to repay the home loan inside the required time frame as the debt is guaranteed by real property. In addition, Chapter thirteen bankruptcy has a fee schedule that will be court ordered, that permits the home owner make payments on her real estate loan to get caught up to date on their mortgage payments.

Not everyone qualifies for bankruptcy and if the borrower does meet the standards, there will be legal fees. It might cost the borrower more in legal fees than if they were to simply knuckle down and make your home loan payment. If you know somebody that is of the mind that declaring bankruptcy may be helpful for the problem, an attorney will likely be able to answer whatever questions you have. Simply put, insolvency is very detailed, the home owner really ought not set about to do it without help from a an attorney.

This is not legal advice. Contact a bankruptcy lawyer in your particular state for bankruptcy advice advice.

This entry was posted on Wednesday, March 25th, 2009 at 11:44 am and is filed under Credit Repair, Finance + Capital, Tips + Tricks. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.