Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. However, it is not as simple as a case of either /or and a decision cannot be made this easily. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. The single method of stopping this from happening in 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. It will be the same for anyone who has not paid his mortgage, the bank will foreclose on the house.

Bankruptcy is a last resort legal way to get out of paying your debts if you are unable to do so. These steps put a halt to proceedings against the debtor while the person is in bankruptcy. Therefore, according to law, the mortgage lender must stop all legal action (including foreclosure). But, a mortgage loan company may apply for relief from the mandatory stay, and once it is granted, can go ahead with the previously mentioned action.

Even then to get relieve from the automatic stay a mortgage lender can go for legal action and when granted a stay can comfortably proceed with the further action. The truth is bankruptcy does not stop foreclosure nor does it allow you to keep your house with out paying the mortgage lender. Bankruptcy does not eradicate the situation; it merely slows the process down.

While bankruptcy doesn’t stop foreclosure, it gives a person time to repay or at least makes easy to repay a 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. It is the last resort for any debtor to declare bankruptcy when he is totally unable to meet his creditors commitments.

Bankruptcy can allow a person to not have to make certain payments and, therefore, he might have enough extra money to make payments on his mortgage. A Chapter 13 bankruptcy doesn’t pay off all debts but instead sets up a more manageable payment plan for the debtor.

Sadly, not every person will be eligible for bankruptcy, and even if they are found eligible, there are still legal costs. It may cost you more in legal fees than it does to just buckle down and make your mortgage payment. If you think that bankruptcy might help in stopping or avoiding foreclosure, speak with a licensed advocate. Bankruptcy is a complex process that is best handled by professionals.

The article is composed of generalized info, so if there are any queries of any type in regards to this subject you need to consult with an attorney licensed in your state.

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