When someone is faced with foreclosure on top of an already intimidating amount of debt, it can be a time of understandable stress and uncertainty. Many New Jersey residents with large amounts of debt turn to personal bankruptcy as an answer to their financial situation. Often, when an individual is dealing with debt, a home foreclosure is also on the horizon. Many times, these individuals turn to bankruptcy as a solution not only to solve their debt problems but to prevent a foreclosure.
Filing for bankruptcy causes the court to issue an automatic stay that stops an individual’s creditors from continuing collection activity. It also stops lenders from moving forward with foreclosure proceedings.
Through bankruptcy, and more specifically Chapter 13, an individual may be able to keep their home. Chapter 13 allows homeowners to create a repayment plan that gives people time to catch up on their mortgage payments.
However, as with any bankruptcy filing, homeowners facing foreclosure should consider all factors before making a decision. It is often wise to rely on the expertise of an experienced bankruptcy attorney. An attorney will look into an individual’s specific situation and help determine the best course of action moving forward.
Credit card debt, car loans, student loans and mortgage payments can quickly add up. Although people may think they can manage their debt, it can quickly spiral out of control. Thankfully, there are solutions available to people that allows them to eliminate their debt and begin down a path to financial security.
Source: Realty Biz News, “Can Bankruptcy Prevent a Foreclosure?” Daniel Doran, May 22, 2012