Our Kansas City Bankruptcy Lawyers Explain How to Stop Foreclosure
Our Kansas City Bankruptcy lawyers recently wrote a blog on using bankruptcy to halt certain types of wage garnishments. When you file for bankruptcy, an automatic stay goes into effect that prevents creditor collection attempts. In some cases, this may include a foreclosure sale. You can use bankruptcy to stop a foreclosure of your home. Not only can you protect your home with the automatic stay, filing a Chapter 13 bankruptcy case allows you to get caught up on past-due mortgage payments while discharging debts.
Below, our Kansas City bankruptcy attorneys discuss how bankruptcy can stop foreclosure. If you have any questions about filing for bankruptcy in Missouri or Kansas, then please contact us.
The Automatic Stay and Foreclosure
Can bankruptcy stop foreclosure? Yes, it can. When you first purchase a home and sign a mortgage, the contract gives the lender the right to sell the home to satisfy your debt if you fall behind on payments.
If a creditor already foreclosed upon and sold your home, the automatic stay would not apply. However, you could use bankruptcy to prevent a foreclosure from proceeding, even at the 11th hour.
Will Bankruptcy Let Me Keep My Home?
Some bankruptcy filers, even those filing Chapter 7 bankruptcy cases, may be able to keep their homes under the right circumstances. With a Chapter 7 bankruptcy, the trustee collects and liquidates your nonexempt assets. These are assets that you must include in the bankruptcy estate. Exempt assets can be left out of your bankruptcy, which may include equity in a home.
If you are filing a Chapter 7 case in Missouri or Kansas, and home ownership is a primary concern, then you should discuss the situation with our Kansas City bankruptcy lawyers. We can help you determine which exemptions, if any, apply to your situation. Additionally, we can help you review whether Chapter 13 bankruptcy would be a better choice.
Using Chapter 13 Bankruptcy to Prevent Foreclosure
Chapter 13 bankruptcy can be enormously beneficial if you are behind on mortgage payments. If the lender has not sold your home yet, then you can use Chapter 13 bankruptcy to save your home.
However, Chapter 13 bankruptcy is unique in that your debts are lumped together in a single three to five-year repayment plan. This may include past-due mortgage payments. You can pay back past-due mortgage payments as part of your repayment plan. Upon completing the repayment plan, your mortgage payments are caught up and you keep the home.
There are requirements for filing Chapter 13 bankruptcy. For example, you must have sufficient income to make payments on the payment plan. If you have regular income, which does not necessarily have to come from a job, and you are facing the prospect of foreclosure, then Chapter 13 bankruptcy is an option to consider.
Contact Our Kansas City Bankruptcy Lawyers to Learn More
You can read more about the requirements for filing Chapter 13 bankruptcy on our site or you can schedule a free consultation to talk with one of our Kansas City bankruptcy attorneys. To schedule a free initial consultation with Troppito Miller Griffin, LLC, dial (816) 221-6006 or use the contact form on our site.