Bankruptcy Versus Foreclosure
June 4th, 2009 | 
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Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. The right decision is taking immediately is not very easy. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. There is only on way to stop this from happening and that is pay the mortgage lender. The loan for a mortgage is similar to an automobile loan; when an individual fails to make his automobile payment, the vehicle is taken from him by being repossessed. Therefore the same result will apply to a person does not pay his mortgage payments; he will lose his home through foreclosure.
Bankruptcy is a legal action filed by someone who cannot pay his debts. While the debtor is going through bankruptcy, this step puts an end to anyone engaged in civil proceedings. Therefore, legally, a mortgage lender must cease every legal action, foreclosure among them. But, a mortgage loan company may apply for relief from the mandatory stay, and once it is granted, can go ahead with the previously mentioned action. The truth is bankruptcy does not stop foreclosure nor does it allow you to keep your house with out paying the mortgage lender. Going into bankruptcy does not solve the problem; it only makes the process proceed more slowly.
Bankruptcy can help give a person the needed time, and sometimes make it easier to pay their mortgage lender. It will not, however, stop foreclosure should they still not be able to pay. The debtor and a short time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. It is the last resort for any debtor to declare bankruptcy when he is totally unable to meet his creditors commitments. Under such circumstances, he may be discharged by some unsecured debts but under mortgage, he shall be prepare to repay the debt within the given time as the debt is secured by tangible assets. Also, a chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.
Sadly, not every person will be eligible for bankruptcy, and even if they are found eligible, there are still legal costs. The legal costs and fees may be more than the amount needed to catch up and make current mortgage payments. Talk with a licensed lawyer that specializes in bankruptcy to determine if bankruptcy can really help you avoid foreclosure. Because bankruptcy is very complicated, you ought not attempt to do it on your own.
The article is composed of generalized info, so if there are any queries of any type in regards to this subject you need to consult with an attorney licensed in your state.
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