How Filing for Bankruptcy Can Protect Your Home From Foreclosure

Home Foreclosure


By:Mike Cibik


How Filing for Bankruptcy Can Protect Your Home From Foreclosure


You may not consider your home to be your most valuable asset but, it surely shelters you and keeps you comfortable regardless of your financial condition. Unfortunately, there may come a time when you may fail to pay your mortgage payments. You should always try and arrange for the required amount and avoid foreclosure. However, simply taking loans without thinking about the outcome would be foolhardy.


The best way to avoid losing your home is to file for bankruptcy with further delay when other options don’t look so promising.


How will you avoid your home from being acquired then? This is a question that is sure to trouble you as you try to save yourself from sinking deep into the abyss of debts. Your best bet is to get in touch with a qualified bankruptcy attorney to plan your next move.


A bankruptcy attorney will be able to guide you through the troubled times and help you to understand how declaring filing for bankruptcy can actually work in your favor.


Think of it as a perfect way to get out of a tricky financial situation. You are certainly not alone here. From the king of pop Michael Jackson to Francis Coppola and many other top celebs have done it to save themselves as well as some of their prized possessions.


Time is of the essence though. You should act quickly without losing even a minute trying to find alternate ways to avoid foreclosure. When you know for sure that your assets are going to be seized filing for Chapter 7 bankruptcy may give you additional time to find the required amount for paying off your debts. Else opt for a Chapter 13 bankruptcy that may actually help you keep your home.


A trifle confusing, isn’t it? Make sure your lawyer explain the facts clearly as you try to deal with this temporary setback. So, should you opt for Chapter 7 or would Chapter 13 be a better option? Here are the facts. These will help you make an informed decision.


Chapter 7: What it means


Filing for Chapter 7 would automatically enforce a stay on your property. The person who you owe money to would be unable to initiate the sale proceedings for the moment. The sale of your home would thus be postponed in accordance with the law immediately.


However, you only get a breather for a limited time usually around 2-3 months or slightly more. This may actually help you when foreclosure is not looming large on the horizon. This is an ideal way to get rid of all your debts along with your mortgage dues. You should try and pay off your mortgage at the first opportunity though and get to modify it according to your convenience in order to retain the ownership of your home.


This is a simpler and speedier way of keeping your home when:

  • You have no nonexempt equity
  • There are no pending mortgage payments
  • You have not taken a 2nd mortgage


Chapter 13: When is it preferable?


Well, you may want to stay put in the place you call home. The authorities will allow you to do so even in the face of an imminent foreclosure if you file for Chapter 13 bankruptcy. The legal procedure will allow you to set up a repayment plan for meeting your mortgage dues.


You can propose the time period yourself but be sure that it does not extend beyond 5 years. You will also have to have a steady income to take advantage of this option. Also, make sure to pay both your present mortgage dues along with the amount due as a part of your unpaid mortgage regularly and attempt to clear it all by the time proposed for repayment. The foreclosure will be withdrawn instantly, and you get to live in your home indefinitely thereafter.


You will be best protected by filing for Chapter 13 bankruptcy when you:

  • Have equity in your home
  • Have unpaid mortgage payments to clear
  • Have a 2nd or 3rd mortgage on the house


Contact Cibik & Cataldo Today


For over three decades Cibik & Cataldo have been helping people in distress keep their homes. Call us at 215-735-1060 if you would like a free consultation about your foreclosure case or with any bankruptcy questions you may have.



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