Author: Sal Farzin
Many homeowners these days are going through the mortgage foreclosure process. Most of them usually end up filing for bankruptcy in an attempt to save their properties from being auctioned off. The bankruptcy option is actually the process least understood by a lot of homeowners. It is also the least popular at that. However, this option can actually provide a ray of hope for mortgage foreclosure victims. There maybe drawbacks in filing for it in one way or the other. But it may actually save your home and your credit history at the same time.
Bankruptcy is also referred to as Chapter 13. It a provision of the law where in a restructured payment plan is created in an attempt to mend one's debts and credit problems. The payment plan through bankruptcy can sometimes get very expensive. But a lot of individuals still go for it just so they can get their finances back on track. After all your obligations are met, the bankruptcy clause would be lifted and the repayment of regular mortgage continues.
If foreclosure is your main problem, you can actually file for bankruptcy and stop the entire mortgage foreclosure process - at least for a certain period of time. This is most applicable at the point wherein the trustee's sale is being enforced. Usually, this is the most critical part of the entire process of bankruptcy, especially for those facing an imminent foreclosure on their mortgage. Filing for Chapter 13 will give the borrower some time to plan and hopefully, save their ownership of the property.
Chapter 13 can be a good option for people who are facing foreclosure. But of course, you may also want to exhaust all of your alternatives first. Bankruptcy is not always the best solution, but it is still a solution nonetheless. Every mortgage foreclosure situation is unique. What works for others may not work for you and vice versa. It takes a lot of financial analysis to find the best possible solution to your money concerns.
Ideally, mortgage foreclosure should be the last resort for many homeowners facing foreclosure. Talk to a lawyer who handles personal bankruptcy cases and try to acquire a good understanding of everything involved in this particular law. You have to be well-informed about the implications of bankruptcy before filing for it because it is going to affect your finances and social status more than anyone else.
