Perhaps you have lost your job or encountered some other financial hardship that has caused you to fall behind on your mortgage payments. If you are unable to catch up the past due payments, and the mortgage lender sets your house for foreclosure does it automatically mean you will lose your home?
The answer to this question may depend on how you quickly you take action to stop the foreclosure. Foreclosure notices should be taken very seriously. Once you receive a notice regarding foreclosure, time is of the essence.
One of your options may be to file for bankruptcy. A chapter 13 bankruptcy may allow you an opportunity to restructure your debt and save your home. Your home is a secured debt and must be paid in order for you to keep it. However, the bankruptcy may be able to provide a more manageable payment plan. For example, let’s say your mortgage payment is $1000.00/month and you fall six months behind. The mortgage company is now demanding $6,000.00 be paid in one lump sum or they will foreclose on your home. A bankruptcy restructuring may allow you to pay the $6,000.00 over several years allowing you to remain in the home.
Similarly, the same issue can arise if you fall behind on your car payment or any other secured debt. Remember, secured debts must be paid if you want to keep the property.
Many people believe that bankruptcy is about not paying your debts, but that is simply not the case. In 2015, Texas bankruptcy filings show there were more chapter 13 cases filed than chapter 7 cases, an indication that some debtors are trying to repay their creditors.
If you find yourself in a position where you have fallen behind on property that you would like to keep, be proactive and get legal advice as quickly as possible.
The above is provided for informational purposes only and is not, nor should it be construed as, legal advice.