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 Filing Personal Bankruptcy Could Help You Keep Your Home

   Heading for foreclosure? Home Foreclosure Fighter will negotiate with your bank to save your home, Act Now!

Once an individual is faced with a home foreclosure family, friends and others will often offer unsolicited advice wanting only to help their friend or family get out of a sticky situation. Filing a Bankruptcy Petition is a serious action that any individual can take to stop or stall a foreclosure. The ramifications are long-lasting and must be thoroughly weighed when making this financial decision. Unfortunately others may hold of this option on as the best option when dealing with a home foreclosure in order to forestall the inevitable.

The concept behind filing bankruptcy is that it will stop foreclosure. Today an individual will have three options when filing bankruptcy-Chapter 13, chapter 11 and chapter 7. At this time chapter 13 is considered the best time for personal filing with the intent of stopping a foreclosure. Each state has a different day of the month in which they do a home sale. When a Chapter 13 is filed in an ideal world any credit card debt and mortgage debt will have to go by the rules of the bankruptcy court. The goal is to allow the individual to make normal house payments in the future and pay off credit cards with disposable income.

The Chapter 13 bankruptcy puts an automatic stay into effect which basically stop foreclosure proceedings on your home by your mortgage company. The mortgage company cannot contact you in regard to your pre-filing mortgage arrears or the amount you are behind in mortgage. In most cases you have up to five years under Chapter 13 bankruptcy to cure the delinquency in your mortgage payments. This means that you must pay off the money owed prior to Chapter 13 within the first five years after filing.

You should also be aware however, the mortgage company can attempt to set aside the automatic stay and pursue foreclosure if you are not in compliance with the terms of your chapter 13 repayment plan. This means if the repayment plan which was set up by the Chapter 13 court case is not maintained then the mortgage company is able to pursue you and continue foreclosure.

Individuals who are employed or have a steady source of income can file Chapter 13 bankruptcy in an effort to stop foreclosure. You must have enough income to make your bankruptcy plan payments as well as all current mortgage payments that come do after you file for Chapter 13 bankruptcy in order for the court's to approve your plan. Payments are faxed so that you can meet all of your living expenses first and then pay any additional income to creditors. An experienced attorney can help you create a repayment plan that works for you and your mortgage company.

Chapter 13 bankruptcy is an affordable solution for people only if the financial situation which brought them to foreclosure in the first place was a temporary. The cost of Chapter 13 bankruptcy may be less than the cost of refinance or take out a second mortgage but will only be a stopgap measure if the individual does not have enough income to meet their payments in the Chapter 13 bankruptcy repayment plan.

If filing Chapter 13 bankruptcy is an option it should be done prior to the mortgage company selling the home. If you find yourself behind in mortgage payments call an experienced attorney to explore debt work out payment plans, bankruptcy and all other options before the situation spins out of control. Individuals may be able to look through their options with out the added benefit of an attorney but it will require a bit of leg work and research to understand each of the options.

The process starts when the homeowner petitions the court to accept the filing. This petition does not have to be accepted by the court but if it is the court appoints a trustee who determines the repayment schedule. If the homeowner's assets do not qualify, or if the petition was filed too recently, then the court does not have to accept the filing. The amount of repayment is based on the income and can substantially eliminate a portion of certain debt.

If the petition is accepted then the trustee will determine how the monthly income from the homeowner will be distributed to his creditors. As soon as the filing has been finalized the homeowner or no longer has the ability to sell any of his assets without the trustee's authorization. You temporarily lose your ability to sell your home or any other large assets such as a car or boat without the approval of the trustee.

If you find a buyer the trustee will usually allow the sale but only if convinced that the price is fair market value. Homeowners could attempt to sell their assets below market value in order to achieve an early sale and decrease their financial liability. If the sale or transfer of title took place in the previous six months the trustee can have the deed voided and the sale reversed.

Lenders know that many homeowners filed bankruptcy because they believe they will be stopping the foreclosure but they do not often understand the legal process of bankruptcy and the long-lasting negative consequences on their credit history. It will take 10 years or more of staying current on every financed purchase in order to eradicate the negative effect of a Chapter 13 bankruptcy on credit history.

Chapter 13 bankruptcy is a matter of public record for 20 more years and will stay on the credit report under public records for up to 20 years. A foreclosure will stay on credit history for seven years. This makes the option of filing for Chapter 13 bankruptcy in order to maintain a residence a negative option for many people. These public records are easily accessed by future employers so don't omit this information is asked on a job application.

For some people Chapter 13 Bankruptcy will stop a foreclosure if they can maintain the payments but for most it is simply a stopgap measure with very long term consequences.

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