Can filing a bankruptcy put a permanent stop to foreclosure?
The answer to this question, like most legal questions, is that it depends. It will depend on the Chapter of bankruptcy the debtor files, whether the property is the debtor’s principal place of residence, and, if it is, whether the arreages can be made up through a plan covering three (3) or five (5) years.
In Chapter 7 bankruptcy, the debtor, if late payments and a foreclosure is pending, will likely lose the property if not able to pay the balance owed on the property. However, under Chapter 13 and Chapter 11, a debtor is able to make payments on the past due payments over the length of the bankruptcy "plan" when the property is the debtor’s principal place of residence. Further benefits are offered to debtors under bankruptcy when the property is either commercial or an investment or rental property.
To see whether bankruptcy can assist you and prevent permanent foreclosure, contact the Henshaw Law Office today at (408) 599-1305.
No. Filing a bankruptcy is not the best solution to stopping a foreclosure. All it can do is delay the foreclosure process and give you time to catch up on your payments. As soon as the bankruptcy-instated suspension is revoked, your lender may ask for full settlement of the loan. In this situation, refinancing is almost impossible as this move will badly hurt your credit score.
