Our San Jose Bankruptcy Attorneys Can Help Stop Foreclosure
We have helped hundreds of clients stop foreclosure by filing for bankruptcy protection. We know that your home is your most precious asset, and we want to do everything possible to help you save your home. The two main types of consumer bankruptcy offer different advantages and disadvantages, so it is important to meet with a bankruptcy lawyer in San Jose who knows the market and the law right now before it is too late.
Chapter 13 Bankruptcy Will Stop Foreclosure and Can Provide a Way to Get Current on Your Mortgage
- Cure Delinquent Payments. Because Chapter 13 is a repayment plan, it can provide a vehicle for “curing” or bringing current your mortgage loan over three or five years. If your mortgage lender is threatening a foreclosure if you don’t pay a large lump sum to reinstate and bring the loan current all at once, then Chapter 13 bankruptcy may help you save your house while you come current over time.
- Automatic Stay Protection. Don’t forget that the first protection everyone gets when filing bankruptcy—whether Chapter 13 or Chapter 7—is protection from the Automatic Stay. The Automatic Stay prevents creditors from taking actions to collect debts from you, including foreclosure actions, for as long as the Automatic Stay remains in effect.
- Stripping Off Second Mortgages. In some cases, in Chapter 13 bankruptcy, you can “strip off” a second mortgage lien, such as a home equity line of credit. Lien stripping is not available in every case, so you should meet with one of our San Jose Bankruptcy attorneys right away to see if you can remove a junior lien from your property.
- Loan Modification. Filing a Chapter 13 bankruptcy will not force your mortgage lender to offer a loan modification. However, Chapter 13 can provide you with the “breathing room” necessary to allow you to apply for a loan modification and work with your lender to hopefully arrive at a loan modification with better payment terms such as principle reduction, reduced interest rate, or a lower monthly payment.
Chapter 7 Bankruptcy Can Delay Foreclosure
- Delay the Foreclosure Process. Like Chapter 13, filing Chapter 7 bankruptcy will stop foreclosure. Your creditors, including your mortgage lender must stop all collections against you due to the Automatic Stay of bankruptcy. This includes any foreclosure action. If your mortgage loan is seriously delinquent, however, the mortgage lender may file a motion with the Bankruptcy Court asking that the Automatic Stay be lifted so that they may proceed with the foreclosure process. But this takes time. A typical Chapter 7 case lasts 90 days from the filing of the case to the closing of the case. This delay can give you time to find a home to rent, negotiate a short sale, or request a loan modification from your mortgage lender. If your goal is to permanently avoid foreclosure, Chapter 13 bankruptcy offers a greater opportunity to save your home by providing a path to curing a mortgage default over time.
We work tirelessly to help Bay Area residents avoid or delay foreclosure through bankruptcy protection. Don’t try to go it alone! Call us today for a free consultation!
