Will Bankruptcy Stop Foreclosure? Find Out For Who
There are two types of bankruptcy that most people use when they file for bankruptcy. The first type is Chapter 7 Bankruptcy and the second common type of bankruptcy is Chapter 13 bankruptcy. Some people who are facing foreclosure might wonder "Will bankruptcy stop foreclosure?" The answer depends on the type of bankruptcy that you file for. Only in certain types of bankruptcy will bankruptcy stop foreclosure, and not everyone is qualified to file for bankruptcy or for every type of bankruptcy.
If you are filing Chapter 7 Bankruptcy, the answer to the question "Will bankruptcy stop foreclosure?" is only temporarily. When you file a Chapter 7 Bankruptcy, an automatic stay is issued which temporarily stops all creditors from trying to collect money from you while you are in bankruptcy proceedings. However, this is temporary, and unless you use this time to negotiate with your lender to come up with an acceptable plan for repaying what you owe, the final answer to the questions "Will bankruptcy stop foreclosure?" in the case of a Chapter 7 bankruptcy is no. Chapter 7 bankruptcy does not get rid of secured debts such as mortgages. Many people mistakenly think that filing for Chapter 7 Bankruptcy will get rid of all their debts and this is just not the case. Some types of debt are excluded from Chapter 7 Bankruptcy filings.
If you are eligible to file Chapter 13 bankruptcy, the answer to the question "will bankruptcy stop foreclosure?" might just be yes. In Chapter 13 bankruptcy you come up with a plan to pay your lenders, including your mortgage lender, a certain amount of money over a period of 3 to 5 years, and as long as this plan is accepted and you make the payments on schedule, your mortgage lender can't foreclose on you. However, only certain people are eligible to file for Chapter 13 bankruptcy.
Not everyone can file for bankruptcy, so depending on your situation, the answer to the question "does filing bankruptcy stop foreclosure on your home?" might be no for you. If you are not eligible to file for bankruptcy, this isn't the solution for you. And if you are only eligible to file for Chapter 7 Bankruptcy, you won't be able to use bankruptcy to stop foreclosure. Only if you are eligible to file for Chapter 13 Bankruptcy and successfully complete the process, including making all the scheduled payments according to your Chapter 13 reorganization plan will bankruptcy stop foreclosure. Free Foreclosure Consultation
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