Foreclosure for the Rich
Comments: 0 - Date: April 1st, 2009 - Categories: Credit, Help, Your Finance Resources
Many individuals need to pick between filing bankruptcy or allowing their mortgage lender to foreclose on their house. If monthly or bi-weekly mortgage payments are not received as agreed, the bank will likely file for a foreclosure on the home. The single guaranteed way to block this from happening is to make a payment to the mortgage lender on time. House loans are very similar to auto loans; if you cannot pay your monthly payments you will lose it. It is essentially the same for everybody who has not been able to pay their mortgage; the bank can begin the foreclosure process.
Bankruptcy is a legal action registered by someone who cannot pay their debts. Once bankruptcy is filed, all active civil legal proceedings associated with the mortgage are put on hold. Legally, a home loan creditor has to terminate all collection actions including, but not limited to, foreclosure. A mortgage company may be permitted to continue if they appeal for relief from the stay period; and if it is granted, can continue with the aforementioned action. Bankruptcy will not halt foreclosure and you still must pay back your home loan. Bankruptcy does not resolve the original issue, it just makes the process of foreclosure continue slower.
While bankruptcy is not going to obstruct foreclosure for good, it could give a person enough time to repay the over due or at least it will make it little easier to pay back a home loan lender. Bankruptcy requires a home loan lender to freeze foreclosure actions, a debtor has a bit of time to raise the money to pay back the creditor. Financial insolvency is the final fall back for any borrower. This will eventually happen when she is totally unable to pay their creditor’s commitments. Under insolvency, some debt will probably be dismissed but the mortgage will not. The borrower must be ready to pay back the real estate loan inside the given time frame as the debt is secured by an asset. In addition, Chapter 13 insolvency has a schedule of fees that is court ordered, that permits the borrower make payments on their mortgage to get up to date on their mortgage payments.
There will be legal fees. It might cost more in legal fees than it does to simply pull the belt tighter and make up the past due financial commitments on the house loan. If you know somebody that is thinking that declaring bankruptcy might be a benefit to the situation, a bankruptcy attorney should be able to answer whatever questions you have. Simply put, insolvency proceedings are extremely detailed, the home owner should not set about to do it without help from a a professional.
This article contains basic information that may not be relevant in any or all states. This is not legal advice. We make no representation that this article constitutes legal advice.