Stop Home Foreclosure with Bankruptcy

The possibility of losing a home to foreclosure is one of the biggest fears for homeowners. In recent years the amount of home foreclosures in Orlando has been at an all-time high – many of them stemming from the economic recession that started back in 2008.

There isn’t much you can do to stop your home from being foreclosed on, but filing for Chapter 7 or Chapter 13 bankruptcy is an option. Upon filing for bankruptcy you immediately fall under the protection of certain “automatic stay” provisions that stop most debt collection actions. Believe it or not one of the primary reasons why people file for bankruptcy is to save their home from foreclosure.

Bankruptcy Options

If your lender has already begun foreclosure proceedings on your Orlando home, filing for Chapter 7 bankruptcy will stop the foreclosure action. However, if you wish to keep your home, you must catch up on the late payments. Failure to do so may encourage your lender to petition the Bankruptcy Court and ask to vacate the automatic stay and allow the foreclosure case to continue. Chapter 7 bankruptcy may allow you to bring your mortgage payments up-to-date and keep your home. It also provides relief from other debt such as credit cards, medical bills, and more.

If you’re making a steady income and simply need some more time to get caught up on your payments, Chapter 13 bankruptcy may be your best option. Realistically if property values have dropped in your Orlando neighborhood, leaving you with little to no equity in your home, Chapter 13 may be your only hope of retaining your property unless you can negotiate a mortgage modification agreement with your lender. Under a Chapter 13 bankruptcy plan, you could have up to five years to get caught up on your mortgage.

Once you file for bankruptcy, we recommend that you continue making mortgage payments by either check or money order for a period of at least six months. It is important to send such payments by certified mail with a return receipt. This provides you with proof that your payments were made and it documents when the payments were received. The continuation of payments prevents your lender from petitioning the Bankruptcy Court to vacate the automatic stay and allow the foreclosure case to resume.

If your property is in foreclosure or if you are delinquent on your mortgage payments, we can help. Contact Tudhope Law in Orlando, Florida today at (407) 969-0044 to schedule a free consultation to discuss how to stop creditors from foreclosing on your home.