Being threatened with foreclosure in Hamilton, OH is a horrible experience. It is the last stop on a path lined with collection letters and harassing phone calls. In most cases, the mortgage lender was only one of the creditors, although they were the creditor with the power to put the family on the street.
Filing for bankruptcy can eliminate much of the debt, offering a fresh start. As soon as the bankruptcy is filed, creditors must stop their collection efforts. This includes the mortgage lender, and the foreclosure will be halted. How, or if, the home can be saved depends on the unique circumstances and whether the homeowner chooses to file for chapter 7 or chapter 13.
Chapter 7 and Foreclosure
Chapter 7 is designed to eliminate all or most debt. Child support, college loans and most taxes are exceptions. When the home is being foreclosed, filing for chapter 7 will halt the foreclosure process for a few months, but will not stop it permanently.
If the homeowner is current on mortgage payments but is facing a higher mortgage payment or reduced income, it might be possible to save the home by eliminating the other debts, thus making it possible to keep paying the mortgage.
Chapter 13 and Foreclosure
One of the primary reasons that people file for chapter 13 bankruptcy protection is to save their home. It’s important to begin the bankruptcy process as soon as possible, as once the home has been sold by the bank, it cannot be saved. Chapter 13 offers the chance to establish a three to five-year partial repayment plan with creditors. If the homeowner has negative equity, the bankruptcy will cancel second mortgages.
The repayment plan will include the late mortgage payments that will be repaid over time with the negotiated balances for the other debts. However, the homeowner will have to prove they have sufficient monthly income to stay current with the mortgage in the future. Since the amount due each month under the repayment plan will be substantially lower than the current amount due for those bills, most people find that this is manageable.
Dean Snyder, Attorney at Law, has been assisting people facing foreclosure in Hamilton OH, for over 20 years. In an emergency to halt a foreclosure, bankruptcy can be filed on the same or next day. Visit the website and select contact us to schedule a free consultation.