What Is The Relationship Between Bankruptcy And Foreclosure?
Is there a relationship between bankruptcy and foreclosure? If there is, what do you need to know about the connections between foreclosure and bankruptcy? In short, many people who are considering bankruptcy are also in situations where they may be facing foreclosure if they have a mortgage on their home. Yet that is not the only link between bankruptcy and foreclosure. Depending upon your financial circumstances, you may be able to file for bankruptcy in order to stop a foreclosure and to remain in your home. An experienced bankruptcy attorney in West Palm Beach can give you more information, and we can speak with you today about your situation in order to help you understand your options.
Bankruptcy and Foreclosure Often Coincide with One Another
For many individuals in South Florida who are homeowners with mortgages and who are struggling with debt, considering the possibility of bankruptcy and facing foreclosure often coincide with one another. To be sure, when a person is struggling to make utility payments, credit card payments, medical bill payments, and payments on other types of consumer debt, they are also often struggling to make mortgage payments. As such, consumers who are behind on mortgage payments are often behind on other types of debt, too, and may be considering foreclosure. Of course, this is not always the case, but it is one way in which foreclosure and bankruptcy may be interconnected.
Chapter 13 Bankruptcy Can Stop a Foreclosure
More significantly, Chapter 13 bankruptcy is important to know about in relation to foreclosure because this type of bankruptcy can actually stop a foreclosure and allow the homeowner to remain in their home. Given that Chapter 13 bankruptcy is a type of reorganization bankruptcy, it allows debtors to reorganize debt (including mortgage debt), to catch up on mortgage debt owed, and to get caught up with mortgage payments. As soon as a debtor files for Chapter 13 bankruptcy, the automatic stay will halt any foreclosure actions, and then the debtor can catch up on their loan over the course of their repayment plan.
Chapter 7 Bankruptcy Can Temporarily Halt Foreclosure
The automatic stay in a Chapter 7 bankruptcy case will also temporarily stop a foreclosure, but this type of bankruptcy does not allow a debtor to catch up on payments or to remain in their home. If you want to find out more about using bankruptcy to stop a foreclosure, you should speak with an attorney about Chapter 13 bankruptcy in Florida.
Contact a West Palm Beach Bankruptcy Attorney
Bankruptcy processes and foreclosure processes are two different things, but as we have discussed above, they can often be related to one another. Moreover, individuals who are struggling with debt and who own their homes are often struggling to make mortgage payments, which frequently means that other types of consumer debt tend to be coupled with back-owed mortgage payments. If you have questions about how bankruptcy can help, or how a Chapter 13 bankruptcy may allow you to avoid foreclosure, you should get in touch with an experienced West Palm Beach bankruptcy lawyer at Kelley Kaplan & Eller as soon as you can. An advocate at our firm can speak with you about your situation and your options.