The cost of
living keeps going up and your monthly paycheck isn't keeping up with the price
of gas, the cost of food and everything else you value in your life. You can't
save anything because all your money goes to paying bills and supporting
yourself and/or your family. Then….
One day you
receive a notice in the mail from your lender called a "Notice of
Default" or a process server hands you a "Lis Pendens." (
non-judicial vs. judicial foreclosure state) either way, both are bad news
because they mean your lender has initiated foreclosure proceedings against you.This occurs when you owe at least three
months in back payments —
You might
think, “Maybe I can cheat fate by filing for bankruptcy. That will wipe out all
my debts. I can stop the foreclosure, keep the house, and the lender can't do
anything about it." Well, this is not true. Bankruptcy only delays a
potential foreclosure.
Consider
these facts before you think of seeking and retaining a bankruptcy
attorney.
If you file
for personal bankruptcy under Chapter 7 or 13 a so-called "automatic
stay" is placed on all your creditors, including the foreclosing lender,
by the court. HOWEVER, the stay is only a temporary fix to the situation.Chapter 7 or 13 never permanently stops home
foreclosure.In fact the "automatic
stay" is only effective so long as the court wants it to be in place. At
any time the court can grant your lender's motion for "relief from the
automatic stay." Once the court grants that motion the foreclosure against
your home can proceed.
Remember, bankruptcy
only gives you relief from unsecured creditors like credit cards and prevents
certain creditors from pursuing collection action against you. It does NOT
discharge debts such as taxes, child support, alimony or student loans, nor can
it give you relief from other secured creditors — like your lender — whose debt
is secured by the home you're living in.