Bankruptcy could be your answer to foreclosure

| Nov 16, 2017 | Bankruptcy Law Basics, Home Ownership, Tips

If you are falling behind on your mortgage payment for your Memphis home, you are not along. Americans all across the country have found themselves in a downward spiral of debt that includes foreclosure notice. While some lenders will make an effort to work with you to get back on track with your payments, many others will not. Instead, the lender will foreclose on the house and sell it at auction in an attempt to cover the original loan and any other costs associated with the home.

In most instances, the bank will not issue a foreclosure notice until the debtor is two to three months behind on payments. This means that if you have only missed one mortgage payment, you might have time to look into your debt relief options. If you have already explored possible solutions and cannot find one that suits your needs, it might be time to consider bankruptcy.

Automatic stay

One of the benefits of bankruptcy is the automatic stay. Once you receive an Order for Relief from the court, the automatic stay goes into effect and it forces creditors to stop their attempts to collect payment. This means that if the bank issues a foreclosure on your home, the automatic stay will suspend it until you complete the bankruptcy process.

Exceptions

Unfortunately, there are exceptions to the automatic stay. The bank can file a motion to lift the stay and ask the court for permission to continue with the foreclosure. The other exception is that if the bank issued you advance warning of the foreclosure before you started bankruptcy proceedings.

Other benefits

Even if bankruptcy will not save your home from foreclosure, it still has benefits. For example, bankruptcy can help you get the rest of your debt under control so that you can successfully manage your payments within the limitations of your income. Bankruptcy could be your best option to get your finances back on track.

If you feel buried by overwhelming debt, it is important to remember that there are options available. Bankruptcy might be the answer you have been looking for in order to restructure your debt and possibly even save your house from foreclosure.