Bankruptcy Will Stop Your Sale - At Least For Now For $395, you
can stop your sale- at least that is what the ads say. You are
about to find out how bankruptcy can be good or very damaging.
Bankruptcy will stop your foreclosure sale. It's a fact.
However, filing bankruptcy for the sole purpose of stopping
foreclosure is not what bankruptcy is for. And anyone that does
this to avoid foreclosure is in violation of bankruptcy laws.
Here is some basic information on bankruptcy.
What Is Bankruptcy?
There are two types of bankruptcy, Chapter 7 and Chapter 13.
Filing for a Chapter 7 bankruptcy means you are asking the
courts to completely discharge your debts. Filing for a Chapter
13 bankruptcy is when you set up a court- approved plan to repay
your debts.
Now, the two types of bankruptcy:
1.Chapter 13: Chapter 13 bankruptcy is a repayment plan that
will restructure your arrearage. More than 95% of all Ch. 13
bankruptcies filed fail. When you file the Ch. 13, this will
postpone your foreclosure sale until the meeting of creditors
also known as a 341 meeting. This usually takes place 60-90 days
after you file. Also, when you file a Ch. 13, you are paying for
2 attorneys, your attorney to file and another to take payments
and disperse the money to the creditors. At the meeting, you
will have to face your creditors. Many times this can be very
intimidating. The bank will ask for their money or for the judge
to give them a relief of stay. The relief of stay is asking for
the foreclosure to continue. If granted the attorney will
re-start the foreclosure process over with a set foreclosure
sale date around 30-45 days later. IF you do not have some money
for reinstatement for the Mortgage Company or bank, the judge
will likely grant the relief of stay. As you can see, bankruptcy
will stop your sale, but it is only temporary. Now, you have to
deal with the foreclosure process all over again plus now your
credit is in worse shape than before because you now have a
filed bankruptcy that is showing up on your credit file.
2.Chapter 7 – A Ch. 7 bankruptcy is when you request complete
debt relief. When you file a Ch. 7, you are trying to receive a
discharge from all your debts that you list in your bankruptcy.
If you get a discharge, this will relieve you of all your debts
that are listed. Now, the bank can still get a relief of stay
with a Ch. 7 Bankruptcy. Even if you receive a discharge, the
bank can still take the home through foreclosure. When you get a
discharge this relieves you from the debt and the
responsibilities of the debt, however the Mortgage is attached
to your house as a protection for the bank and their interest.
Therefore, the bank can foreclose even if you have received a
Ch. 7 discharge.
Bankruptcy will destroy your credit rating, therefore be careful
when you speak with Bankruptcy Attorneys, this may be the only
option that they know of. In other words, when you talk to
someone that does bankruptcies they will influence you to file
bankruptcy, when you talk to a mortgage officer or bank
official, they will want to influence you to get a loan because
that is what bankers do, if you talk to an investor they want to
buy your house, because that is what investors do, SO be careful
and look out, find someone that does not have an agenda that can
give you strategic advice regarding your current situation. The
rate of people that declare bankruptcy for a second time is as
much as 50%. In some instances, bankruptcy may be a good choice,
but all too often it causes more stress and problems for the
individual. So try to resolve without the use of bankruptcy.
Jimmy Cox www.365homenet.com
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