If you are facing foreclosure on your home due to debt, you may be wondering if bankruptcy can stop foreclosure in Watertown, New York. Facing foreclosure proceedings can be incredibly stressful and overwhelming, which is why bankruptcy can be a viable option for many different situations if you need help with late mortgage payments.
At Grady BK, PLLC, our goal is to provide the guidance and expertise our Watertown clients need as they navigate the process of filing for bankruptcy. We understand how difficult this decision can be and how confusing the process is, which is why we will help you every step of the way as you decide on the type of bankruptcy and file your petition. In this article, we will be discussing if you can file for bankruptcy to stop foreclosure and, if so, what type of bankruptcy is the best option.
How Does Filing Bankruptcy Stop Foreclosure?
Although deciding to file for bankruptcy can be a tough decision to make, there are many reasons why this can be beneficial if you are in a difficult financial situation. Not only can bankruptcy help you address certain types of debt, but it can also help you stop foreclosure on your home.
If you own your own home and you are in a substantial amount of debt, you may find yourself facing threats of foreclosure if you are unable to make your mortgage payments. Filing bankruptcy to stop foreclosure can provide you with options for debt relief so that the foreclosure proceedings do not go through.
When you file a bankruptcy petition, an automatic stay is issued by the court and will remain in effect throughout your bankruptcy case. An automatic stay halts all debt collection attempts, which includes any foreclosure actions that have already been filed. With all foreclosure actions being halted, you can have the time you need to catch up on mortgage payments over the next three to five years.
Chapter 7 vs. Chapter 13 Bankruptcy For Foreclosure
Two of the most commonly used bankruptcy options include Chapter 7 and Chapter 13 bankruptcy. To understand how long bankruptcy will stop foreclosure proceedings, you need to look at both bankruptcy options and how they help specifically with foreclosure. You will also need to ensure that you qualify for either Chapter 7 or Chapter 13 bankruptcy as they both have different eligibility requirements.
The majority of people can usually file for Chapter 7 bankruptcy, with Chapter 13 being an option for those who have too high of a household income to qualify for Chapter 7.
Chapter 7
Chapter 7 is a type of debt relief that most people think of when they are thinking about filing for bankruptcy. It allows you to have certain types of debt discharged so that you no longer have to make payments on them and you can manage other types of non-dischargeable debts.
When it comes to filing Chapter 7 to stop foreclosure, this bankruptcy option does not stop a foreclosure in the long wrong (only for the 3 months that the bankruptcy is open). Because of this, filing Chapter 7 is not going to be the option to save your house unless you can pay off the mortgage arrears in one lump sum payment.
Chapter 13
Unlike Chapter 7 bankruptcy, Chapter 13 is focused on paying off your debt with a personalized repayment plan that addresses specific types of debt. Throughout the course of your repayment plan (three to five years), you’ll be protected from any collection efforts, and certain remaining debts may be discharged after you have completed your plan.
Chapter 13 bankruptcy stops a foreclosure and gives you 3 to 5 years to pay back the mortgage arrears interest free. You will also pay back a percent of your other debt (credit cards, loans, medical, student loans, etc). Because of this, filing for Chapter 13 can allow you to maintain ownership of your home and get caught up on your monthly payments.
The automatic stay will also remain in effect throughout your repayment plan, protecting you from any foreclosure efforts from your mortgage lender.
Whether you choose to file for Chapter 7 or Chapter 13 bankruptcy to stop foreclosure, you need to hire a bankruptcy attorney in Watertown, New York. A bankruptcy attorney will have experience with the different bankruptcy qualifications and the other benefits of using bankruptcy to address foreclosure. An attorney can also help with the filing process to ensure everything goes smoothly and the automatic stay takes effect as soon as possible.
Watertown’s Top Compassionate Bankruptcy Attorney
If you want to use bankruptcy to stop foreclosure on your home, you will need to understand how to go about doing this and the best type of bankruptcy to choose. At Grady BK, PLLC, we will help you with every step of the foreclosure and bankruptcy process to ensure you choose the best possible option to fit your financial goals. Having a Watertown bankruptcy attorney on your side will take some of the stress off of your shoulders, allowing you to proceed with confidence and peace of mind.
At Grady BK, PLLC, we have handled hundreds of bankruptcy cases across Watertown, New York and are dedicated to treating each of our clients as though they were our only client. We provide a personalized approach, ensuring your bankruptcy strategy is suitable for your situation.
Contact us today at 315-299-9005 just cause your financial situation with a bankruptcy attorney in New York. Our team at Grady BK, PLLC, is here to provide you with the legal assistance you need as you file for bankruptcy to stop foreclosure.
