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Bankruptcy Or Foreclosure?
Letting go of one's home can be a devastating experience and an impossibly hard decision to make, especially if you and your family have already invested a lot of money time and effort into the house. With so many memories and experiences to be left behind it may seem difficult to face the future without looking back with some reservations.
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If you're facing foreclosure you may be wondering if it’s time for bankruptcy to be free from the consequences of foreclosure or better yet stop it. Let's discuss bankruptcy versus foreclosure.
BANKRUPTCY VS FORECLOSURE -- If you feel to make your mortgage payments you may be in danger of foreclosure and losing your home. Foreclosure proceedings usually begin once the homeowner fail several times to pay their mortgage.
If your finances have been hit hard due to a loss of a job or other circumstances and there are no other options left for you to turn to you may even consider filing for bankruptcy.
Both bankruptcy and foreclosures are legal actions that you turn to as a way to protect whatever assets you have left and stop any lawsuits from creditors and collection efforts. But will bankruptcy stop foreclosure?
THE AUTOMATIC STAY -- Once you file for bankruptcy you can expect the court to issue an order of relief for you whether you file for Chapter 7 or Chapter 13. This order is issued automatically and there is no need to request for it. You order comes with an automatic stay which instructs creditors to stop collection activities right away.
Bankruptcy does not stop foreclosure but it increases the amount of time until the property is finally repossessed. Once the order is issued the foreclosure process may be postponed. If your home has been included in a foreclosure sale it can be postponed for about two to four months while your bankruptcy filing is pending.
However there are other factors to consider. If your lender is granted permission by the bankruptcy court that allows the sale of your house you may get less than three or four months temporary stay. Regardless, bankruptcy will serve to delay the foreclosure process.