Being confronted with the possibility of foreclosure is terrifying. Individuals may not know how to proceed. They want to save their home for the sake of their family and well-being. There are ways to do so. If an individual is facing financial troubles and their home is in jeopardy, they may be eligible to file for bankruptcy. Through bankruptcy, an individual’s home can be saved from foreclosure proceedings.
How does bankruptcy stop foreclosure?
When individuals file for bankruptcy, this puts an automatic stay in place. An automatic stay is a useful tool in the bankruptcy process. With an automatic stay, creditors are barred from contacting you. They cannot harass you for compensation anymore. With this in effect, individuals have the breathing room they need to plan for a repayment method and to get their finances in order. This will also have the effect of preventing foreclosure of your home.
Although bankruptcy may seem like a negative process for people, it can prove to be effective. It should not be avoided at all costs. Instead, individuals should use this process when they have no other options available to them. Bankruptcy can help to save your home, ban contact with creditors and develop a better plan for the possibility of a more successful financial future. Individuals can consider Chapter 7 and Chapter 13 bankruptcy proceedings to help them with their situation. Both processes are fairly similar and have benefits to them. With both processes, an automatic stay is put into effect immediately after filing the correct papers.
What is the Foreclosure Settlement Conference?
New York state law requires parties to enter into a Foreclosure Settlement Conference when action is taken against a residential property. This allows for you to apply for a loan modification. When you finish applying, the bank will review your financial ability to determine if you meet the guidelines for a government loan modification program or one provided by the bank.
What is a short sale?
A short sale is another way that individuals may be able to stop the possibility of foreclosure. For this option, a lender can agree to a loan payoff that is less than the value of the mortgage by your sale of the home, but the lender must approve the short sale. This is not a guaranteed method since the lender has to approve the transaction. However, if approved, it may be an effective way to prevent foreclosure.
The Law Offices of George Poulos is an experienced Workers’ Compensation, personal injury, bankruptcy, and Social Security Disability law firm with offices in Queens and the Bronx. If you require strong legal representation, contact our firm today to schedule a free consultation.