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Can bankruptcy stop a home foreclosure action?

On Behalf of | Nov 3, 2016 | Firm News, Home Foreclosure

Bankruptcy can be a useful tool for Florida homeowners who have gotten behind on their payments. Filing for either Chapter 7 or Chapter 13 bankruptcy can stop a home foreclosure action in its tracks, but there are caveats. It might be possible for your mortgage lender to resume the foreclosure with the permission of the bankruptcy court.

Whether you are able to bring the mortgage loan current is at the center of the bankruptcy filing and the foreclosure action. The bankruptcy court will more than likely allow a mortgage lender to pursue foreclosure if you are not able to get caught up on your payments and make them monthly in accordance with the terms of the loan. With this in mind, a thorough and realistic look at your financial situation is needed before filing.

If you are not too far behind on your mortgage loan payments, filing for Chapter 7 could give you the time you need to get caught up. You also might be able to make your payments if other debts are discharged. If you are significantly behind on your payments, a Chapter 13 might be a better option since part of the repayment plan would be including catching up on those missed payments. However, neither of these plans will work if there is no realistic way to maintain the mortgage payments after the proceedings for either chapter are concluded.

It can be a challenge for many Florida residents to be objective when it comes to whether they can afford to keep their homes. Like many of them, in the face of a home foreclosure action, you might simply be panicking without taking time to sit back and determine whether keeping the home is a worthwhile endeavor. Since there are limitations on how often each chapter of bankruptcy can be filed, you need to make the most of it when you file. The only way to do that is to first determine how to ensure that you have the best chance possible at a fresh financial start, which could mean finding another place to live.

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