Some individuals think about the decision to file bankruptcy or simply allow the mortgage lender to start foreclosure. It cannot be presumed to be a simple case of either/or as an answer is not possible and cannot be made this easily. It’s very simple, if you don’t pay your mortgage, the lender can send your home into foreclosure. The single method of stopping this from happening is to make the payment to the mortgage lender. A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. The rule is same for all and is applicable to any person not paying his mortgage payments – they will have to forgo the residence through foreclosure.

A legal action filed by somebody who is unable to pay his debts is called as bankruptcy. If the debtor is in bankruptcy then all the civil proceedings to collect debts are stopped. A mortgage lender must stop all legal actions, including foreclosure proceedings. The mortgage lender can apply for relief from the automatic stay. When it is granted, then the lender can proceed with the foreclosure. Declaring bankruptcy will not halt foreclosure and you still must repay your loan. Bankruptcy may make your financial problems easier to handle, but it will not make them completely go away.

While bankruptcy doesn’t stop foreclosure, it gives a person time to repay or at least makes it easier to catch up with the mortgage lender. Because bankruptcy forces a mortgage lender to stop the foreclosure proceeding, it gives the debtor additional time to come up with funds to repay the lender. Bankruptcy allows you to discharge unsecured debt which may enable you to have more money to pay the mortgage payments.

If you have no other option, consider declaring bankruptcy to stop collections and give yourself time to get back on track. A Chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.

Unfortunately, not everyone qualifies for bankruptcy and if they do qualify, there are legal fees to pay. The amount of money you need to get your mortgage payment current may be nothing compared to the legal fees you will have to pay. If you are considering that declaring bankruptcy may benefit your situation and help you get out of a foreclosure, see a lawyer. A good lawyer should be able to answer your questions. Bankruptcy is so detailed that you should not try to handle it by yourself.

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• Comparing The Differences Between Picking Bankruptcy Or Foreclosure
• How To Stop Foreclosure By Filing Chapter 13 Bankruptcy
• Rebuilding Credit After Filing Bankruptcy
• Filing Bankruptcy Yourself
• How To Keep The House After Bankruptcy?