Can Bankruptcy Save Your Home from Foreclosure?

Facing financial distress can be overwhelming, especially when your home is at risk of foreclosure. This fear and confusion is all too real for many homeowners; each year, an estimated 10 to 20 million Americans lose their homes through eviction, mortgage foreclosure, tax sales, eminent domain, post-disaster displacement, and other less-studied forms of housing loss. But hope is not lost. At Gertz & Rosen, Ltd., with over 45 years of experience, we’ve helped countless homeowners save their property through bankruptcy. In this post, we’ll explore how bankruptcy can be crucial in preventing foreclosure, helping you understand the process and its possibilities.

Understanding Foreclosure

Foreclosure is the legal process by which a lender takes possession of a property from a borrower who has defaulted on their mortgage payments. This typically occurs when a homeowner falls behind on payments for several months. Once the foreclosure begins, it can be challenging to stop or reverse. However, filing for bankruptcy halts the foreclosure and gives you time to catch up on your payments.

How Bankruptcy Can Help

There are two types of bankruptcy that can potentially help save your home from foreclosure: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy eliminates most unsecured debts, such as credit card debt, medical bills, and personal loans. It does not directly stop foreclosure, but it can give you some time to negotiate with your lender or explore other options to keep your home.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization of debt that allows homeowners to propose a repayment plan over three to five years. This option may be more suitable for homeowners facing foreclosure as it allows them to catch up on missed mortgage payments while keeping the property.

The Automatic Stay

One of the greatest things about bankruptcy is the automatic stay. It is a court order that immediately stops all collection activities, including foreclosure proceedings. Once you file for bankruptcy, creditors can’t come after you for money, giving you time to reorganize your finances and work on a plan to keep your home.

Other Benefits of Bankruptcy

Aside from the automatic stay, bankruptcy can provide additional benefits that can help save your home from foreclosure:

• Stops wage garnishment: Filing for bankruptcy can also stop creditors from garnishing your wages. This means more money in your pocket to catch up on missed mortgage payments.
• Eliminates other debts: With less debt, it may be easier to make mortgage payments and get back on track financially.
• Protects co-signers: If someone else is liable for the mortgage with you, filing for bankruptcy can protect them from collection efforts by the lender.

Working with an Experienced Attorney

Filing for bankruptcy can be complicated. It is crucial to work with an experienced attorney who understands the intricacies of bankruptcy laws and can help you navigate through the process successfully. At Gertz & Rosen, Ltd., our team has extensive experience handling bankruptcy cases and can provide personalized guidance specific to your situation.

It’s important to keep in mind that bankruptcy may not be the best option for everyone facing foreclosure. Our team will thoroughly evaluate your case and advise you on the most suitable action to save your home.

Secure Your Home’s Future

Facing foreclosure is a daunting experience, but bankruptcy can provide a powerful tool to help you regain control and protect your home. By understanding the foreclosure process and how bankruptcy can intervene, you can make informed decisions that align with your financial goals. Whether you pursue Chapter 7 for temporary relief or Chapter 13 for a long-term solution, the key is to act promptly and strategically.

For those seeking legal support, Gertz & Rosen, Ltd. offers comprehensive advice tailored to your specific situation. Don’t face foreclosure alone—reach out for a consultation today and take the first step toward financial recovery.