Wednesday, October 7, 2009

Does bankruptcy stop foreclosure?

A simple question that gets asked often.

A Chapter 13 bankruptcy will.
Yes, filing this before the sale date stops foreclosure.

But it'll only work long term if you're now able to afford to pay the regular mortgage payment again.
You'll also have a trustee payment to pay, one of the key elements of that will be your arrearage.
Have an attorney run the numbers for your situation.
But, if the original cause for you being behind is resolved, this could be a simple resolution.

While you have the phone and your finances available, present those same details to your lender. Many are offereing modification plans even better than bankruptcy. They may willingly offer you better terms.