Bank finance articles and tips

The most recent foreclosure statistics present a disheartening image of the real estate market and the American economy. According to RealtyTrac, an average of 1 in every 634 housing units received a foreclosure filing in December of 2011. The states with the highest rates of foreclosure were California, Florida, Nevada, Arizona, Georgia, Michigan and Illinois. As homeowners across the country are facing foreclosure or threatened foreclosure, it is important to consider what remedies are available.

Filing for bankruptcy is one way that foreclosure can be halted or even avoided entirely. When a person files a bankruptcy petition, this places what is called an "automatic stay" on all debt collection proceedings against the petitioner. This includes foreclosure. In a Chapter 7 filing, this may give a debtor time to figure out how to sell or surrender the home by way of a deed in lieu of foreclosure or a short sale. In a Chapter 13 filing, the automatic stay may not only buy the homeowner time to determine what to do, but past due mortgage payments and penalties may actually be included in the homeowner's repayment plan - enabling him or her to actually save the home and avoid foreclosure.

Chapter 13 bankruptcy is unique in that it is a reorganization of debt. A borrower who seeks bankruptcy protection under Chapter 13 of the U.S. Bankruptcy Code will submit a repayment plan to the bankruptcy court. This plan, which typically lasts for 3 to 5 years, will involve the debtor making regular payments to a bankruptcy trustee, who will then distribute the payment amongst creditors. This payment amount is based upon the debtor's disposable income. This repayment plan can include past due mortgage payments and penalties, and as long as the debtor remains current on these payments and future mortgage payments, he or she may be able to keep the property.

This is a brief overview of how Chapter 13 bankruptcy may affect foreclosure proceedings. Every case is different, and certain factors may affect a debtor's ability to save his or her home. That is why you may find it helpful to consult with a professional. A lawyer who is experienced in handling Chapter 13 bankruptcy proceedings can offer insight as to how your home may be affected if you file. You can also get information about the particular advantages and disadvantages of Chapter 13, such as its ability to protect co-signers or its affects on your credit score. These are all issues that you may want to take into account before making a decision.
About this Author

With multiple office locations throughout Texas, the Malaise Law Firm offers highly experienced and dedicated legal representation to borrowers throughout the area who are dealing with foreclosure, overwhelming debt, wage garnishment and the many other issues that plague debtors. With a combined total of more than 4 decades of legal experience, the attorneys at the Malaise Law Firm stand prepared to offer the level of legal counsel that is so crucial in debt-related matters. If you are in need of a San Antonio bankruptcy attorney who will offer you accurate insight, the firm can help.

By John Todd Malaise