Using Bankruptcy to Stop Foreclosures in Georgia
Most people have heard that you can stop foreclosure by filing for bankruptcy, but is it really true? In many cases, the answer is yes. Declaring bankruptcy can bring foreclosure proceedings to a halt, end harassment from creditors, and give you time to reorganize your finances and make up missed payments on debts. At Brian R. Cahn & Associates, LLC our attorneys have extensive experience helping north Georgia homeowners save their homes through bankruptcy.
Halting the Foreclosure Process
The first thing a bankruptcy filing accomplishes is to stop the foreclosure process. Once an “automatic stay” is in place, creditors are not allowed to collect on debts or enforce liens, and in most cases, foreclosures are included within the scope of actions prohibited by the automatic stay. The automatic stay applies in both Chapter 7 and Chapter 13 cases, and is triggered as soon as you file for bankruptcy.
Equity in Chapter 7 Bankruptcy
With Chapter 7 bankruptcy, a debtor may exempt home equity from liquidation. This means that if you have paid off a significant amount of your mortgage, building up equity in your home, your home may be exempt from Chapter 7 liquidation because your mortgage is a secured debt. In this scenario, you will still be obligated to pay your mortgage after bankruptcy, but you should be able to afford to make your payments because Chapter 7 discharges all other unsecured debt.
Reorganizing Mortgage Debt with Chapter 13 Bankruptcy
Among the debts that may be repaid through a Chapter 13 repayment plan are arrearages (delinquent payments) on a home mortgage. Once a repayment plan is in place, your lender is forced to allow you to catch up on past due mortgage payments, enabling you to save your home from foreclosure and resume normal monthly mortgage payments at the conclusion of bankruptcy proceedings.
In some cases, we can “strip” a second mortgage in bankruptcy, further easing your mortgage debt and lessening the amount you owe your creditors. This may be possible if you have two mortgages, and the balance of your first mortgage is more than the current value of your home. For more information, please see our page explaining lien stripping in bankruptcy.
Contact Us to Learn More about Saving Your Home from Foreclosure
If you are facing foreclosure, bankruptcy can help you hold on to your property and maintain your lifestyle. Start taking control of your financial situation today and contact Brian R. Cahn & Associates, LLC for a free initial consultation. With offices in Woodstock, Cartersville, Calhoun, Dalton and Dallas, we are conveniently located to serve clients throughout northwest Georgia.