bankruptcy lawyer

Bankruptcy and Foreclosure

Many people seek bankruptcy protection to avoid or delay foreclosure on their home. The foreclosure process begins when the homeowner has fallen behind on his or her mortgage payments. A formal demand for payment, known as a Notice of Default, is then issued from the lender. The ultimate outcome is a termination of all rights of the homeowner covered by a mortgage and the estate becomes the absolute property of the lending institution. If you have already tried other alternatives and cannot negotiate with the lender, bankruptcy may help you in avoiding or stalling foreclosure.

The filing of bankruptcy triggers the automatic stay, which stops all creditors from any action to collect their claim including foreclosure. This process, however, may be only temporary: if the owner doesn't continue to make payments, the foreclosure process can resume. Many strapped homeowners do find, however, that getting relief from their other debts creates enough room in their budget to make their mortgage payments more feasible.

In Chapter 7, the automatic stay lasts only as long as the property is not abandoned by the trustee, as either valueless to the estate or as exempt, or until the case is closed.