One of the biggest questions that people ask when considering bankruptcy is what will happen to their house. In some tough economic times, a house is seen more as a liability than an asset, but many consumers would rather keep it at any cost, even when finances are tight.
So, what happens to a house during a Colorado Springs bankruptcy filing?
Colorado Springs Bankruptcy Lawyer Stephen H. Swift has been helping homeowners with financial problems for years. A home may be the one stable place that a family has and the possibility of losing a house to a Colorado foreclosure can be terrifying.
Good news, however. Bankruptcy is a way to actually help a family save their home.
Colorado Bankruptcy Stops Foreclosure
News reports have indicated that a Colorado foreclosure can take up to two or three years to complete if lenders are unable to determine who owns the note on the loan. This can be advantageous to homeowners because it gives them flexibility as time goes by.
However, the rule of thumb is that the sooner the homeowner files bankruptcy, the better. Whether a consumer’s house is in the early stages of foreclosure, such as when the bank begins sending out notices of default, or the process is nearly over and the house is going to be taken away and sold during an auction at the courthouse steps, bankruptcy can help.
An automatic stay can prevent creditors from trying to collect money while a person is in the middle of the bankruptcy process. This will temporarily suspend the foreclosure process. An experienced bankruptcy lawyer will be able to help the homeowner buy time and work out other debt obligations through bankruptcy so that a plan may be set up to keep the house.
In some jurisdictions, a homeowner can continue making payments during Chapter 7 bankruptcy, even as other debts are liquidated. This process will also allow the consumer to get rid of other types of debt, including credit card debt and medical bills, thus freeing up money to continue paying the mortgage.
Under Chapter 13 bankruptcy, homeowners can get protection for their home, while setting up a payment plan over several years that is more affordable to the consumer. This form of bankruptcy allows the consumer to get rid of most of the debt after the time period has ended and is designed mainly for people with a steady income stream.
Stop Foreclosure, Keep the House
In either option, bankruptcy can be a wise move for a person who is falling behind on monthly mortgage payments, but who wants to try to find a way to continue living in the home. The foreclosure process has few guarantees for homeowners, but bankruptcy can be a helpful tool.
The Law Office of Stephen H. Swift is available for a free initial consultation to discuss your situation, your rights and whether bankruptcy may be able to help you save your home from foreclosure. Serving clients in in Colorado Springs, Pueblo, Denver or throughout the area.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
