Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. However, it is not as simple as a case of either /or and a decision cannot be made this easily. A mortgage lender will initiate a foreclosure proceeding if the monthly mortgage payments fail to be met. There is only one way to stop this from happening and that is pay the mortgage lender. The loan for a mortgage is similar to an automobile loan; when an individual fails to make his automobile payment, the vehicle is taken from him by being repossessed. If you fail to make your monthly mortgage payments you too, could lose your home to foreclosure.

This actions brings to a stop every civil proceeding involving the debtor during the period of his bankruptcy. So, by law, a mortgage lender has to suspend all legal actions including a foreclosure action. However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action. In short, bankruptcy will not allow a debtor to retain a house without paying his debt to the mortgage lender, and it will not halt the foreclosure process. Going into bankruptcy does not solve the problem; it only makes the process proceed more slowly.

While bankruptcy doesn’t stop foreclosure, it gives a person time to repay or at least makes it easier to repay a mortgage lender. The debtor has a short time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. In addition, because bankruptcy may get rid of certain unsecured debts, the debtor might be able to free up funds that he can use to make up the back mortgage payments.

If you have no other option, consider declaring bankruptcy to stop collections and give yourself time to get back on track. A Chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.

Not everyone qualifies for bankruptcy and unfortunately if they do qualify, there are legal fees to pay. It may cost you more in legal fees than it does to just buckle down and make your mortgage payment. Talk with a licensed lawyer that specializes in bankruptcy to determine if bankruptcy can really help you avoid foreclosure. Bankruptcy is a complex process that is best handled by professionals.

Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. Decision-making is not just a matter of yes or no, it is not that simple. A mortgage lender will file a foreclosure action when the homeowner has not paid his monthly mortgage payments. The best way to prevent this action would be to pay the holder of your mortgage. A mortgage loan can be compared to a car loan which if not paid back on time, the car could go for repossession. The same goes for anyone who has not paid his mortgage, the bank will foreclose on the house.

The definition of bankruptcy is to file legal paperwork to resolve an inability to pay debts. While the debtor is going through bankruptcy, this step puts an end to anyone engaged in civil proceedings. Therefore, according to law, the mortgage lender must stop all legal action (including foreclosure). However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action. Declaring bankruptcy will not halt foreclosure and you still must repay your loan. Bankruptcy may make your financial problems easier to handle, but it will not make them completely go away.

While bankruptcy doesn’t mean you don’t have to pay your mortgage, it gives a person time to repay or at least makes it easier to repay a mortgage lender. The debtor has some time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. In addition, because bankruptcy may get rid of certain unsecured debts, the debtor might be able to free up funds that he can use to make up the back mortgage payments.

The last resort for any debtor who is unable to keep up his repayment schedule at the prevailing circumstances, is to declare insolvency or bankruptcy to avoid further consequences. Under such circumstances, the court, based on financial details submitted by the debtor, may permit the debtor to repay the loan over a period of time by designated installments under Chapter 13 of the bankruptcy law.

Sadly, not every person will be eligible for bankruptcy, and even if they are found eligible, there are still legal costs that will need to be paid. The legal costs and fees may be more than the amount needed to catch up and make current mortgage payments. If you are thinking that declaring bankruptcy may benefit your situation and help you get out of a foreclosure, a good lawyer should be able to answer your questions. Bankruptcy is so detailed that you should not try to handle it by yourself.