When you’re short on money, you have to prioritize the bills — and your mortgage payment may take a back seat to your grocery bill and utilities. Eventually, however, the bank may threaten foreclosure if you don’t catch up.
Can bankruptcy help? Here are some of the things you should know about bankruptcy and foreclosure:
- An automatic stay can immediately halt all collection efforts. That means that your creditors can’t call you and the bank can’t take your property or force you out of the home. All lawsuits against you must be paused.
- The stay doesn’t last forever, but it does give you time to develop a plan. You may want to keep your house. If you do, the automatic stay may give you the opportunity to work out an agreement with the lender. If keeping the house isn’t financially feasible, the stay gives you more time to put money together for your move.
- Bankruptcy allows you to walk away without fear. Having unresolved debts hanging over your head is a miserable experience — and the debt from the mortgage can follow you even after the home is resold. Unless the bank can recoup what you owe, they can come after you for the money. If you file bankruptcy, you can include the house in the bankruptcy and have the debt forgiven.
- It can help strip away liens. If you have a second mortgage on your home, bankruptcy can sometimes enable you to eliminate that debt while still reaffirming your primary mortgage to save your home.
You don’t have to wait until you’ve received a foreclosure notice to talk to a bankruptcy attorney about your situation. You may have more options than you realize. Find out more about your options for financial relief today.