Foreclosures are some of the worst things people deal with. One minute, they’re enjoying their homes, but the next, they’re facing homelessness.
Foreclosures generally happen when the owner of a home can’t afford to make their monthly payments. After missing payments or making incomplete payments for long enough, the lender may decide that the home needs to be sold to get back what they’re owed. This is a foreclosure.
You can stop a foreclosure in a few ways, but one that is good to know about is starting a bankruptcy case. Bankruptcies can help stop the foreclosure process, make it so that creditors have to stop calling you and give you the peace of mind that you won’t be losing your home any time soon.
How does bankruptcy stop the foreclosure process?
When you enter into bankruptcy, all types of collections need to stop immediately. At that point, people who are trying to collect against you need to begin calling your attorney instead of you. Your attorney will then speak with them about the pending bankruptcy and begin putting together a list of creditors who need to be paid, how much they’re owed and other important information.
With a mortgage, there is a possibility that you could catch up on payments during bankruptcy. By eliminating other debts, you may have enough to pay what you owe. You may also be able to enter into an agreement to have missed payments added on to the life of the loan or to have the fees and fines waived. Your attorney can talk to you more about what to expect if you have to file for bankruptcy.