Are you an Auburn or Opelika resident facing foreclosure? Here’s how bankruptcy could save your home.
Foreclosure is the legal process that allows a lender, or creditor, to sell your property to satisfy the debt you owe. Of Alabama’s 2,288,330 homes, 391 went into foreclosure in April of 2022, revealing a foreclosure rate of one in every 5,853 homes.
Fortunately, if you’re an Alabama resident facing foreclosure, a lender won’t begin the foreclosure process until you’ve fallen far behind in mortgage payments. This gives you time to try some alternate measures before filing for bankruptcy, such as loan forbearance, a short sale, or a deed in lieu of foreclosure.
When these measures fail, it makes sense to consider whether bankruptcy can help you avoid foreclosure, or at least buy you a little time. As a bankruptcy lawyer in Auburn, Alabama, David S. Clark and his team of professionals have years of experience helping Alabama residents navigate financial hardship and they can help you too.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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Delaying Foreclosure With The Automatic Stay
One of the biggest benefits of filing for bankruptcy is the court-mandated order that causes any creditors to cease their collection activities immediately. Known as “The Automatic Stay”, creditors can’t call, email, visit or do anything that attempts to collect payments from you.
Ultimately, If your home has been scheduled for a foreclosure sale, and you file for bankruptcy, the automatic stay will legally postpone the sale while your bankruptcy is pending (this process typically lasts three to four months)
While this is true, a lender can appeal to the bankruptcy court for permission to proceed with the foreclosure by filing a “motion to lift the automatic stay.” If successful, a creditor can continue with the foreclosure sale as well as any collection activities.
Please note that although the automatic stay can temporarily stop a foreclosure sale, you may still lose your home if the foreclosure sale is completed under state law before filing for bankruptcy.
How Chapter 13 Bankruptcy Can Help
If you are an Auburn or Opelika resident that is facing foreclosure due to unpaid mortgage payments but want to remain in your home, then filing for Chapter 13 Bankruptcy could help.
Also known as a wage earner’s plan, Chapter 13 bankruptcy enables Alabama residents with a regular income to develop a plan to repay all or part of their missed mortgage payments. The plan is typically between three to five years and requires timely payments or payroll deductions.
While Chapter 13 Bankruptcy can stop foreclosure proceedings, you’ll need enough income to not only meet your current mortgage payment, but also any arrearage (late unpaid mortgage payments).
David S. Clark: An Experienced Auburn & Opelika Bankruptcy Attorney
When it comes to understanding the relationship between bankruptcy and foreclosure, it’s a good idea to consult an experienced bankruptcy attorney. With over 25 years of combined experience, the attorneys at David S. Clark are here to help any Auburn or Opelika resident navigate through bankruptcy.
If you are facing foreclosure and don’t know where to turn, Contact David S. Clark today!
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.