Both bankruptcy and foreclosure are extremely complicated topics. Not only can the guidelines governing each can seem overwhelming for a non-lawyer, but the emotional reaction people have when feeling desperate about finances can make you feel like you are drowning.
Depending on which type of bankruptcy protection you qualify for, you may be able to protect your home from foreclosure. First things first: hire a knowledgeable lawyer who will explain all your rights and assist you in making decisions regarding the process. This is your home we are talking about — likely your largest investment to date. Take the time necessary to become informed about your options regarding foreclosure and bankruptcy law in New Jersey.
Chapter 13: If you file for this type of bankruptcy, you may be able to save your home. If you qualify, and are able to make loan payments on a revised schedule, you can ward off foreclosure. Chapter 13 bankruptcy often removes second and third mortgages; this may give you the extra funds needed to pay back the first loan.
If you are unable to make any payments, you won’t be able to meet the obligations listed in your repayment plan. This will start the foreclosure process anew. To avoid this problem, you may want to consider filing for Chapter 7 bankruptcy protection instead. This option won’t stop the bank from foreclosing on the loan, but it will give you a clean debt slate going forward.
Speak to Joel R. Spivack today for more information about how you may be able to avoid or delay foreclosure through bankruptcy.