Avoiding Foreclosure by Declaring Bankruptcy

Many struggle with financial distress and substantial debt at some point in their lives and this issue experienced by so many can have dire consequences such as inability to pay medical bills, the dissolution of a marriage, or even losing a home to foreclosure. Although declaring bankruptcy is on very few bucket lists, it is often the best, if not the only, financial decision for those in extreme debt. Individuals experiencing significant financial difficulties should seriously consider bankruptcy as it can help them along the path to financial recovery while protecting the assets people need most, like a home. Declaring bankruptcy can mean not only getting debt forgiveness and the ability to rebuild a credit score, but also allows individuals to defend their homes against foreclosure according to a Raleigh bankruptcy lawyer.

Foreclosures don’t happen overnight—they’re usually the result of missing several consecutive mortgage payments and there are usually several ways to prevent them from happening. Once it’s all but certain that it will occur, though, it’s smart to consider declaring bankruptcy in order to stop it. When a person files for either Chapter 7 or Chapter 13 bankruptcy, a court order for relief is issued that puts an automatic stay on all personal assets that stops creditors from repossessing them. These reposessable assets include furniture, cars, and yes, houses. Any scheduled foreclosures can be postponed for a few months or until personal finances have recovered. Chapter 13 bankruptcy partnered with a detailed financial plan is the most effective way to save a house and reduce mortgage debts. Declaring Chapter 13 bankruptcy can allow for extra time to pay off the late fees on a mortgage and defer or eliminate second or third mortgage payments. While all options should be investigated when facing foreclosure, bankruptcy should be seriously considered as it is one of the most efficient ways to save an at-risk home.