delphi bankruptcy

A Comparison of Bankruptcy and Foreclosure

Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. Decision-making is not just a matter of yes or no, it is not that simple. If monthly mortgage payments are not made, the lender will file a foreclosure. Avoid foreclosure by bringing your payments up to date. Mortgage loans are just like car loans, if you do not make payments you will lose it. If you fail to make your monthly mortgage payments you too, could lose your home to foreclosure.

A legal action filed by somebody who is unable to pay his debts is called as bankruptcy. These steps put a halt to proceedings against the debtor while the person is in bankruptcy. Therefore, according to law, the mortgage lender must stop all legal action (including foreclosure). Even then to get relieve from the automatic stay a mortgage lender can go for legal action and when granted a stay can comfortably proceed with the further action. Declaring bankruptcy will not halt foreclosure and you still must repay your loan. The situation is not fixed by declaring bankruptcy, it just slows things down.

Although filing bankruptcy can’t stop foreclosure, it provides an individual with additional time to repay a mortgage lender or facilitates paying the lender of the mortgage. The debtor and a short time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. It is the last resort for any debtor to declare bankruptcy when he is totally unable to meet his creditors commitments. Under such circumstances, he may be discharged by some unsecured debts but under mortgage, he shall be prepare to repay the debt within the given time as the debt is secured by tangible assets. In addition, chapter 13 bankruptcy is a fee schedule that is court-ordered, and lets the debtor make payments on his mortgage to get up to date on his balance across a time frame.

Not everyone qualifies for bankruptcy and Unfortunately if they do qualify, there are legal fees to pay. It could cost you more in legal fees and costs then it may to catch up your mortgage payments. Talk with a licensed lawyer that specializes in bankruptcy to determine if bankruptcy can really help you avoid foreclosure. Bankruptcy is complicated enough that you need to hire a lawyer who knows what he or she is doing.

This article contains information of a general nature, therefore if you have further questions on the matter you should discuss them with a licensed legal professional in your own state.