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Is your mortgage lender threatening foreclosure?

Is your mortgage lender threatening to take your home? If so, you are not alone. Florida actually has one of the highest foreclosure rates in the country, and it has been this way for some time now.

If foreclosure is on your horizon, it is normal to feel that you have few, if any, options to stop it. However, this may not be true. Various foreclosure defense strategies may benefit your situation, including bankruptcy.

Foreclosure does not happen overnight

If you are behind on your mortgage payment, you will likely have some time before your lender threatens foreclosure. Numerous creditors will wait until homeowners are several months behind before taking action. Before the foreclosure process starts is the ideal time to consider your options. However, if the process has already begun, you may still have time to stop it.

How can a bankruptcy filing stop the foreclosure process?

The term bankruptcy has a lot of negative connotations. This is a financial step that most do not want to take, but due to their current economic situations, bankruptcy may be the best option and can have a positive result.

If you file for bankruptcy — it does not matter if it is a Chapter 7 or 13 – the court will issue an automatic order for relief. Once awarded, your creditors will have to stop their attempts to collect on any debts you owe them. This means that mortgage lenders are not permitted to continue with the foreclosure process without court approval or until your bankruptcy case comes to a close.

Which type of bankruptcy has the potential to save my home?

If you want to save your home and you have money coming in, but not enough income to keep up with your debt obligations, you may qualify for a Chapter 13 bankruptcy. If approved, you will set up a repayment plan for any housing payments that are past due and other debts. In order to prevent foreclosure, however, you will have to keep up with both the repayment schedule and your mortgage payments.

A Chapter 7 bankruptcy, on the other hand, may result in the court releasing you from your debt obligations, but it may not stop a lender from taking your property.

Do not wait until it is too late

Whether bankruptcy will stop a foreclosure and allow you to keep your home or simply delay the inevitable depends on your current situation. There is a point at which even bankruptcy may not help you keep your property. You certainly don’t want it to get to that point. By seeking assistance from an experienced bankruptcy lawyer as soon as possible, you may have more options available to you and have a better chance of saving your home from foreclosure.

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