If you are behind on your mortgage and facing foreclosure, bankruptcy may offer you relief.  For most filers, the instant your bankruptcy case is filed, the automatic stay goes in to effect.  Once your creditors are notified about your case, foreclosures and other collection activities by your creditors are halted.

Filing Chapter 7 bankruptcy can temporarily stop a foreclosure for a few months. This may give you time for a loan modification or to receive other assistance.  However, if this doesn’t allow you to get current on your loan, your mortgage lender may eventually succeed in foreclosing your home. At most, this may only stall the process for six months because Chapter 7 does not cure the arrears on your mortgage loan.

On the other hand, Chapter 13 bankruptcy is an effective way to prevent your home from being foreclosed because it gives you time to catch up on missed payments.  This is done by filing your Chapter 13 plan with the court, which allows for up to 60 months to pay off your past due mortgage payments.  Unlike a loan modification, your lender does not have to agree with your plan.  As long has you make your plan payments and your plan complies with the bankruptcy laws, the court will approve your plan.

But don’t wait until it’s too late.  It is much better to talk to an Asheville Bankruptcy Attorney sooner than later.  If your mortgage company starts a foreclosure, it can typically add $2,500.00 or more that you will have to pay back in the bankruptcy just to pay your lender’s foreclosure attorney fee.  Also, if you wait until after the foreclosure sale and upset period, the foreclosure will be final and bankruptcy may offer you no relief.  Contact Mosley Law Firm today to get started.