Bankruptcy and Foreclosure

If you fall behind on your mortgage payments, your bank may initiate a foreclosure lawsuit. Typically foreclosure follows after at least a couple of months of missed payments on your mortgage. The policy varies by lender, but your bank or mortgage company may not seek foreclosure unless you have defaulted on payments for 2 to 4 months. If you are struggling to keep up with your mortgage payments and believe that your lender may pursue foreclosure, bankruptcy is one option that could help you save your home.

As soon as you file for bankruptcy under Chapter 7 or Chapter 13, an “automatic stay” is issued for all collections actions being made against you. This means that until the bankruptcy is granted, your creditors and lenders cannot seek payments from you and your house cannot be foreclosed on. This period typically lasts 3 to 4 months, which may give you enough time to come to an alternate solution or agreement with your lender to save your home.

Chapter 13 provides somewhat more security for keeping your home than does Chapter 7. Chapter 13 is a repayment plan bankruptcy, meaning that you will develop a financial plan to pay back all of your outstanding debts to creditors over a period of time, typically 3 to 5 years.

Under Chapter 13, you have the opportunity to catch up on all of the late payments that you have fallen behind on and pay these to your lender to catch up on your mortgage. If you are successful at catching up on outstanding payments while you continue to make your normal monthly payments, you can save your home from the threat of foreclosure.

Contact Us

For sound legal advice and assistance on protecting your home from foreclosure, please contact the experienced New Orleans bankruptcy lawyers of Kervin & Young, LLC today at 504-599-5906.