When an individual or family sits down to consider bankruptcy as an option to stop a financial downward spiral, that individual or family may not be fully aware of how a bankruptcy filing will impact the home foreclosure process. The thought of home foreclosure under any circumstances can be a frightening prospect, but this prospect can often be avoided by filing for bankruptcy. It is important for Florida residents considering bankruptcy to understand the how bankruptcy filings affect home foreclosures.
First and foremost, once bankruptcy has been filed there is a stay of home foreclosure action. This stay, or temporary halting of the home foreclosure, does not mean a petitioner gets to stop paying his or her mortgage and forget about past-due debts. It is still necessary to catch up on house payments and assess one’s standing in regards to being able to pay a mortgage in the future.
The type of bankruptcy also factors into exactly what will happen to a pending home foreclosure. Chapter 7 bankruptcy can mean a discharge of debts, and this alone can free up funds that may be devoted to mortgage payments, helping families stay in their homes rather than losing them to foreclosure. Chapter 13 bankruptcy can be helpful because of its repayment plan, meaning a family can have years to catch up on payments and gain control of existing debts.
The way in which bankruptcy can impact a home foreclosure truly varies based on the situation. With up-to-date knowledge and trusted advice, a Florida family can assess its options and determine which course of actions fits its needs when it comes to bankruptcy and the fate of a home. Our website provides further information about how a home foreclosure can be stopped via the bankruptcy process.