Facing foreclosure on your home can be overwhelming – especially if you’re dealing with other financial woes.
If you’ve fallen behind on your mortgage payments, filing bankruptcy may be one way to keep your home while managing your way through your debt.
Unfortunately, bankruptcy is surrounded by misconceptions and stigmas. Because of this, many people do not know about all of the ways bankruptcy can help them sort out their financial situation. If you’re struggling under debt that has gotten out of control, the Brownsville bankruptcy lawyers of the Law Offices of Phillippe and Associates can help you find a path out of your financial troubles.
Home foreclosure happens when a lender or mortgage investor repossesses a home due to a borrower’s inability to make the mortgage payments. Foreclosure may also occur when a homeowner doesn’t pay their homeowner association fees or property taxes.
During foreclosure, the lender may attempt to seize and sell the property in order to make up the money lost when the mortgage went into default. A lender can legally repossess a mortgaged home because the home is provided as collateral ensuring that the loan would be repaid.
If the loan isn’t repaid, that collateral can be taken.
How Bankruptcy Can Be Used to Avoid Foreclosure
In most cases, a homeowner will need to miss multiple mortgage payments in order for the lender to begin the process of foreclosure to secure the home or property. Before this can happen, however, the lender has to notify the borrower that they’re at risk of foreclosure.
At this point, the borrower may choose to delay the process by filing bankruptcy.
Filing for bankruptcy will earn you an automatic stay on all debt collections. At this point, the mortgage holder is legally required to halt their foreclosure efforts.
If your mortgage lender has already scheduled your home to be sold at a foreclosure auction, filing for bankruptcy will postpone that sale for 3 to 4 months. Even if the lender is granted a motion to lift the stay, the sale will still be postponed in all likelihood.
In some states, filing for Chapter 7 bankruptcy is likely to result in a borrower’s home being liquidated to repay creditors. However, in Texas, there is a homeowner exemption that allows bankruptcy filers in the state to keep their home through the process.
Filing for Bankruptcy in Brownsville With the Law Offices of Phillippe and Associates
If your home is at risk of foreclosure due to missed mortgage payments, filing for bankruptcy may give you the breathing room needed to get a handle on your debts. The bankruptcy process is a powerful financial tool enshrined in our Constitution. This process may be just the tool you need to rebuild your financial future.
If you’re being threatened with foreclosure on your home, contact the Brownsville bankruptcy lawyers of the Law Offices of Phillippe and Associates at (956) 544-6096 to discover your path to an improved financial situation.