Before your home is foreclosed, bankruptcy may be able to put a stop to the process altogether. Our Colorado debt relief team outlines how bankruptcy can help save your home from foreclosure below.
Automatic Stay
One aspect that all chapters of bankruptcy have in common is a provision called “automatic stay.” This provision is put into place by the bankruptcy court, making it illegal for any of your creditors to take collection actions against you, such as foreclosing your home or repossessing your car.
This provision lasts for the duration of the bankruptcy, giving you the time you need to focus solely on your finances, instead of feeling the constant pressure from your creditors.
How Chapter 13 Can Protect Your Home
Chapter 13 bankruptcies are some of the best ways to stop your home from being foreclosed. One of the biggest reasons for this is the fact that it is also a chapter that doesn’t require the liquidation of your assets. It reorganizes your current payment plan to make paying back your debts more affordable while maintaining possession of property that would otherwise be liquidated, like your home.
Chapter 13 takes debts that would normally require immediate payment and extends them over the life of the bankruptcy. This is how it is able to stop foreclosure, by taking your mortgage payments that need immediate attention, and either discharging them or giving you more time to pay them off.
The only caveat is that you must maintain consistent payments on your plan in order for the bankruptcy benefits to remain intact, otherwise, you may be forced to liquidate a portion of your assets or even switch to a different type of bankruptcy.
How Can Help
If you are looking to gain relief from your debts, our team is committed to finding creative and effective strategies to help you gain the financial freedom you deserve.
If you would like to learn more about how we can help you get rid of debt, don’t hesitate to call our award-winning team today at to schedule your free consultation.