Stopping Foreclosure With Bankruptcy
By Jimmy Cox, Fri Dec 9th
Will Stop Your Sale - At Least For Now For $395, youcan stop your sale- at least that is what the ads say. You areabout to find out how can be good or very damaging.
Bankruptcy will stop your foreclosure sale. It's a fact.However, filing for the sole purpose of stoppingforeclosure is not what is for. And anyone that doesthis to avoid foreclosure is in violation of laws.Here is some basic information on bankruptcy.
What Is Bankruptcy?
There are two types of bankruptcy, Chapter 7 and Chapter 13.Filing for a Chapter 7 means you are asking thecourts to completely discharge your debts. Filing for a Chapter13 is when you set up a court- approved plan to repayyour debts.
Now, the two types of bankruptcy:
1.Chapter 13: Chapter 13 is a repayment plan thatwill restructure your arrearage. More than 95% of all Ch. 13bankruptcies filed fail. When you file the Ch. 13, this willpostpone your foreclosure sale until the meeting of creditorsalso known as a 341 meeting. This usually takes place 60-90 daysafter you file. Also, when you file a Ch. 13, you are paying for2 attorneys, your attorney to file and another to take paymentsand disperse the money to the creditors. At the meeting, youwill have to face your creditors. Many times this can be veryintimidating. The bank will ask for their money or for the judgeto give them a relief of stay. The relief of stay is asking forthe foreclosure to continue. If granted the attorney willre-start the foreclosure process over with a set foreclosuresale date around 30-45 days later. IF you do not have some moneyfor reinstatement for the Mortgage Company or bank, the judgewill likely grant the relief of stay. As you can see, bankruptcywill stop your sale, but it is only temporary. Now, you have todeal with the foreclosure process all over again plus now yourcredit is in worse shape than before because you now have afiled that is showing up on your credit file.2.Chapter 7 – A Ch. 7 is when you request completedebt relief. When you file a Ch. 7, you are trying to receive adischarge from all your debts that you list in your bankruptcy.If you get a discharge, this will relieve you of all your debtsthat are listed. Now, the bank can still get a relief of staywith a Ch. 7 Bankruptcy. Even if you receive a discharge, thebank can still take the home through foreclosure. When you get adischarge this relieves you from the debt and theresponsibilities of the debt, however the Mortgage is attachedto your house as a protection for the bank and their interest.Therefore, the bank can foreclose even if you have received aCh. 7 discharge.
Bankruptcy will destroy your credit rating, therefore be carefulwhen you speak with Attorneys, this may be the onlyoption that they know of. In other words, when you talk tosomeone that does bankruptcies they will influence you to filebankruptcy, when you talk to a mortgage officer or bankofficial, they will want to influence you
to get a loan becausethat is what bankers do, if you talk to an investor they want tobuy your house, because that is what investors do, SO be carefuland look out, find someone that does not have an agenda that cangive you strategic advice regarding your current situation. Therate of people that declare for a second time is asmuch as 50%. In some instances, may be a good choice,but all too often it causes more stress and problems for theindividual. So try to resolve without the use of bankruptcy.
Jimmy Cox www.365homenet.com
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