The potential loss of a home is a tragedy and possibly the greatest reason most people file for bankruptcy. With the sub-prime loan debacle and its ensuing contribution to the downturn of the markets, foreclosures have spiked as well as bankruptcy filings in the last few years. Bankruptcy can delay or prevent foreclosure and is a powerful tool for those who want to keep their homes, but need time to reorder their finances to do so. This is especially true when other efforts have failed, such as sale, refinancing, or loan forbearance. bankruptcy lawyers from Duluth have the understanding and experience to guide you through this important process.
Filing a bankruptcy petition for either Chapter 13 or Chapter 7 results in the court issuing something known as an automatic stay. This action “stays” or stops many actions, such as debt collectors’ harassing calls, evictions and foreclosures, but only under certain conditions:
• The lender can obtain a motion to lift the stay – If your lender can convince the court that you are unable to retain your home – you are in arrears, you have no equity in your house and, even after the bankruptcy, your finances do not appear to be adequate to make the payments, then the court will very likely grant the motion to lift the stay and the foreclosure will ensue.
• The foreclosure notice has not already been filed – Many states have laws that require lenders to give homeowners advance notice of a foreclosure, often as long as three or four months. If, during that three or four months, you file for bankruptcy and the notice runs out before the bankruptcy is finalized, the court will lift the stay and the foreclosure will proceed.
The laws and regulations are many. In order to get the best possible outcome for your situation, it is advisable to contact bankruptcy lawyers from Duluth, who will explain the various nuances of the bankruptcy details.
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