Bankruptcy Can Stop Foreclosure

A Chapter 7 bankruptcy, or liquidation bankruptcy, will create an automatic stay to prevent home foreclosure however; it is only a temporary solution that will only give you a month or two to get your affairs in order before the foreclosure process resumes.

A Chapter 13 bankruptcy filing also creates an automatic stay however; an experienced Chapter 13 bankruptcy attorney can artfully craft a plan of repayment which will cover a period of 3 to 5 years, and if recommended by the trustee and approved by the Court it can save your home. Here experience matters. The national success rate to completion of a Chapter 13 hovers around 45%, while at Burleson Legal Group it is over 90%.

Loan Modification Through Chapter 13

While filing bankruptcy may stop the foreclosure process and provide you with breathing room, you still must provide for repayment of the missed mortgage payments through the Chapter 13 Plan. Additionally, you must resume your regular monthly payments once the bankruptcy case is filed.

If your monthly mortgage payments are too high it might lessen the likelihood of success of your Chapter 13 case. In that case, you may want to consider a loan modification. Your lender might see a loan modification more advantageous while you are in a Chapter 13 because they want you to succeed. They really don’t want the house rather they want your loan payments. So, if it’s a struggle for you to keep up, a loan modification may reduce the interest rate or extend the payment terms, or both, which lowers your monthly mortgage obligation and makes it more likely you will successfully complete your Chapter 13 Plan and discharge debt.

Timing is Crucial

In Wisconsin certain events occur during the legal foreclosure process that can affect your rights after filing for bankruptcy. For instance, if you wait to file bankruptcy after a judgment of foreclosure has been entered then your period of redemption begins to run. This could have negative consequences down the line. Another significant event is the foreclosure sale itself. If you wait to file your bankruptcy after the foreclosure sale you may or may not be able to save your home depending on the situation.

If you are facing foreclosure, do not delay in contacting an experienced attorney at Burleson Legal Group. We will review your situation and help you arrive at decisions that are best for your circumstances. For more detailed information about home foreclosure and bankruptcy in Wisconsin, e-mail or call today!