Author: Elias Maseko
It is not always easy to choose between bankruptcy or allowing a foreclosure. Having an either/or attitude about the decision may make the choice (already a difficult one) all the harder. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. The only way to stop this is to pay the mortgage lender.
A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. If a person does not make their mortgage payments, they face the loss of their home through foreclosure.
For someone who cannot pay his or her debts, bankruptcy is a legal action they can take. The purpose of this action is to stop all the civil action against the debtor while the debtor is in bankruptcy. As a result, the mortgage lender is incapable of immediately continuing their foreclosure, or any other legal action. Still, the mortgage lender will respond by filing for relief from the stay, and once they are granted relief, the proceedings will continue. When it comes down to it, filing for bankruptcy will not prevent a foreclosure, nor will you be able to keep the home if you do not pay the mortgage lender. The best bankruptcy can do is slow down the process, but it cannot stop it entirely.
Even though it doesn\'t stop foreclosure, bankruptcy can also be beneficial in that it will allow a person additional time to make payments, or make it easier to pay the lender. Because bankruptcy makes a lender suspend foreclosure, a debtor will have extra time to get the money to pay the lender. In addition, since bankruptcy can discharge many other debts completely, a person in debt might have more funds available to pay their mortgage. Another benefit is that a chapter 13 bankruptcy filing will allow a debtor to pay their mortgage catch up through a court ordered payment plan.
However, not everyone qualifies for filing of bankruptcy in the first place, and those that do must pay sufficient legal fees. Legal bills can be quite high, and high enough that they outweigh the costs of catching up with the mortgage.
If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. Bankruptcy is a complicated legal process that should not be handled by yourself alone. The material offered in this article should serve only as a general guide, and for more specific information, you should contact a licensed lawyer in your state.
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