Chapter 13 and the Automatic Stay on Foreclosures

In the fight to keep your home from foreclosure, homeowners may be surprised by the options they have. No, you don’t have to just roll over and let the bank take your home away from you. You have several defense strategies – some which are best used earlier in the process and others that are considered more last-minute efforts.

Wherever you are with your home loan, even if you are still able to make your monthly payment obligations, it’s important to know your rights and options in case there ever were to be a situation where you needed to take drastic action to save what’s yours. An option some people fail to consider is filing for Chapter 13 bankruptcy.

The Effects of Bankruptcy on Your Foreclosure

In Florida foreclosures, like elsewhere in the country, filing for Chapter 13 bankruptcy means that the court will issue an “automatic stay.” Once this order has been issued, the bank or creditor must immediately stop trying to collect debts and your mortgage holder must cease any and all foreclosure activities. This is true regardless of where you are in the foreclosure process – even if your home is just days away from being sold at a foreclosure auction.

The automatic stay has the effect of postponing any potential sale of your home for at least several months even if your creditor were to successfully bring a motion to lift the stay (which they will undoubtedly try to do).

Filing for Chapter 13 bankruptcy may also lead to more options for you as a homeowner to retain ownership of your property. Under your Chapter 13 debt repayment plan, you may be able to avoid foreclosure by making timely payments throughout the course of your repayment plan. Depending your circumstances, there also may be opportunities to use lien stripping to save your home if you have multiple mortgages on your home.

One of the biggest concerns for many deciding whether to file for bankruptcy is the damage it will do to their credit; however, foreclosures also damage credit for years. A bankruptcy discharge will offer you a clean slate after the discharge, which will enable you to rebuild your credit in the future.

We recognize that there are no easy options when it comes to foreclosure, but at Jacobs Legal, it is our priority to ensure that your rights are protected and that you have the best foreclosure defense so that you can retain what is yours. If you’re struggling with debt, call us today at 305-358-7991 for legal representation in your foreclosure defense.