Bankruptcy isn’t an easy choice to make; it’s messy, complicated and damaging to your credit. Bankruptcy, however, is a good answer to stall foreclosure. Creditors are going to retrieve what’s theirs; you need a way to fight back. A Dayton, Ohio Bankruptcy Attorney will assist with Chapter 7 or chapter 13 can stop foreclosure using bankruptcy…albeit temporarily.
The liquidation chapter known as chapter 7 can stop bankruptcy with an automatic stay motion. This relief order stops creditors from payment attempts, and it works for creditors who are determined to take your home. During the three to four months of automatic stay, you have options. You can go through with the bankruptcy process, work something out with the lender or find alternatives. What makes chapter 7 different is the length of automatic stay. It can stretch on longer if needed. You can stay in the home while you find another place to stay. It will erase mortgage debt and tax liability.
Creditors are looking for alternatives to break automatic stay in the meantime, and there are two ways. One way is asking for the court’s permission to lift the automatic stay motion. Automatic stay is no more if the courts grant their request. The other way also asks for the court’s permission to break automatic stay but the difference is the time between the foreclosure notice and bankruptcy. If the notice came before bankruptcy, the creditor can shorten the length of automatic stay with the court’s permission. Creditors will also use the lien on your property to take the home. Liens are an obligation to surrender the home if you cannot pay the mortgage.
The repayment plan chapter known as chapter 13 also triggers automatic stay. File bankruptcy during this time. You, the lender and the court must work together to create a repayment plan. This plan lasts between three and five years. You can keep your home as long as you may the monthly payments. What separates chapter 13 from 7 is the way it handles second and third mortgages. If you’re paying the first one off, there won’t be enough money to pay off the second and third. It’s a good chance that you won’t have to pay those mortgages back if it can convert to unsecured debt category. Tax liability is discharged.
Make sure you are making the right choice. Contact us for more information. We can talk to you about it and decide if it’s the right choice for your situation.