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Foreclosure or Bankruptcy

While insolvency does not permanently end foreclosure, it could allow an individual more time to repay the over due or at least it does make it little easier to pay back the lender. Bankruptcy law requires a lender to freeze a foreclosure action, a debtor has a short time to produce the money to pay the lender. It is the final fall back for any debtor to file for financial insolvency when the co

Sometimes individuals will need to pick between filing bankruptcy or allowing their home loan lender to foreclose their house.  If monthly home loan payments are not received on time, the financial institution will likely file a foreclosure on the home.  The single guaranteed way to halt foreclosure from happening is to make a payment to the lender on time.  Mortgage loans are much like automobile loans; if you do not make payments you can get it repossessed.  It will be same for all who have not been able to pay his or her home loan, the lender will likely begin foreclosure proceedings.

Bankruptcy is a legal action filed by an individual who is unable to pay his debts as agreed.  Once bankruptcy is filed, all current civil legal proceedings associated with the home loan will be halted.  Legally, a mortgage creditor has to interrupt every collection action.  A mortgage company might ask for relief from the required stay, and once it is permitted, can go ahead with the previously mentioned process.  Bankruptcy will not stop foreclosure and you must still pay back your home loan.  Going into bankruptcy just makes the foreclosure process proceed more slowly; it can not solve the problem.

Even though bankruptcy will not permanently end a foreclosure, it might give a person more time to pay back the over due or at least it can make it bit less difficult to to repay the home loan lender.  Bankruptcy law requires a mortgage to suspend foreclosure actions, a home owner will have a bit of time to raise the cash necessary to pay the creditor.  Financial insolvency is a final option for all home owners.  Eventually this will happen when she is completely incapable of meeting their creditor's terms of repayment.  With bankruptcy, some debts will probably be dismissed but the mortgage will remain.  The home owner must be willing and able to repay the mortgage inside the mandated time frame as the debt is secured by assets.  Additionally, Chapter 13 bankruptcy has a schedule of payments that is court-ordered, and permits the borrower make payments on his real estate loan to get up to date on their balance.

There will be legal fees.  It might cost the borrower more in legal fees than if they were to just pull the belt tighter and make your mortgage payment.  If you know somebody that is of the mind that declaring bankruptcy can help to solve the problem, a good lawyer should be able to answer any questions you have.  Because bankruptcy is very detailed, the borrower really ought not attempt to do it by themselves.

This is not legal advice.  Contact a bankruptcy attorney in your state for bankruptcy advice advice.

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