What To Know About Bankruptcy And Foreclosure
If you are considering the possibility of personal bankruptcy in Florida, or if your home is at risk of foreclosure, some initial research into either topic might lead you to realize that bankruptcy and foreclosure are frequently discussed in conjunction with one another. You might be wondering: is there a direct relationship between bankruptcy and foreclosure? While many debtors in Florida who are at risk of foreclosure may also be considering bankruptcy because of mounting debt, it is important to know that there are some important connections between bankruptcy and foreclosure to consider. Most important, perhaps, is the fact that filing for Chapter 13 bankruptcy may allow you to stop a foreclosure on your home and to get caught up on mortgage payments.
Our St. Petersburg bankruptcy attorneys can explain more about the relationship between foreclosure and bankruptcy.
Bankruptcy’s Automatic Stay Stops Foreclosure Process from Occurring or Moving Forward
If you are currently in the midst of foreclosure proceedings, or if your lender has indicated that they plan to foreclose on your home, you should know that any type of bankruptcy filing will initially stop a foreclosure process that is happening and will prevent a creditor from initiating a foreclosure. This is due to the automatic stay. In a bankruptcy filing, the automatic stay is an injunction that halts all actions by creditors and debt collectors seeking to take actions against the debtor to collect. Depending upon the type of bankruptcy you are filing for, the automatic stay will either halt actions on your home through the bankruptcy case, or will halt actions through the bankruptcy case in addition to allowing you to remain in your home and get caught up on your mortgage.
In some circumstances, a creditor may be able to ask the court to lift the automatic stay for them, and a foreclosure may be allowed to proceed. This does not happen in all cases, but you should be aware of it and should speak with an attorney to determine the likelihood of this occurring in your case.
Chapter 13 Bankruptcy Can Stop Foreclosure and Allow You to Remain in Your Home
Chapter 13 cases and Chapter 7 cases are quite different when it comes to bankruptcy and stopping a foreclosure.
In Chapter 7 cases, the automatic stay will not ultimately allow a debtor to catch up on mortgage payments since it does not have a debt reorganization component. Differently, Chapter 13 bankruptcies allow the debtor to stop a foreclosure, reorganize debt (including mortgage debt), and catch up on mortgage payments they owe in order to remain in their homes. This is one of the major advantages of Chapter 13 bankruptcy, and it is beneficial to many debtors in Florida.
Contact a St. Petersburg Bankruptcy Lawyer Today
If you have any questions about bankruptcy and avoiding foreclosure, or if you simply want to learn more about your options for filing for bankruptcy in Florida, an attorney can help. Do not hesitate to get in touch with one of the experienced St. Petersburg bankruptcy lawyers at the Law Offices of Stephen Barszcz for more information. We can assess your financial circumstances today, provide you with more information about your bankruptcy options, and assist you throughout the process.