How Chapter 13 Bankruptcy Can Stop Foreclosure

Santa Rosa bankruptcy attorney Adam Garcia can file a chapter 13 bankruptcy petition with the United States Bankruptcy Court, Northern District of California, Santa Rosa Division. In turn, the filing of the chapter 13 petition will stop an impending foreclosure. Under Section 362 of the Bankruptcy Code, the filing of a bankruptcy petition creates the automatic stay; an automatic injunction against most forms of collection. Consequently, when chapter 13 bankruptcy attorney Adam Garcia files your bankruptcy petition with the court any impending foreclosure sale will be halted.

How Chapter 13 Bankruptcy Can Save Your Home

Both chapter 7 and chapter 13 bankruptcy will stop an impending foreclosure sale through the automatic stay. However, only chapter 13 bankruptcy allows you to cure delinquent mortgage payments over a period of 3 to 5 years while retaining possession of your home. Therefore, chapter 13 bankruptcy is the best way to stop foreclosure and save your home.

To explain, while personal liability for mortgage debt can be eliminated in chapter 7 bankruptcy, liens encumbering real property will continue.  Accordingly, if you are in default on your home mortgage the bankruptcy will stop foreclosure for a period of time, but the lender will eventually be able to resume foreclosure at some point in time since (1) you will continue to be in default on your mortgage; (2) the lender’s lien on your property will survive bankruptcy; and (3) the stay will either lift through the lender’s action or the conclusion of your bankruptcy.  Therefore, chapter 7 bankruptcy will stall foreclosure but not permanently stop foreclosure.

In contrast, chapter 13 bankruptcy allows you to force your mortgage lender into a repayment plan.  In chapter 13 bankruptcy you can force your lender to accept missed mortgage payments over several years.  At the conclusion of your chapter 13 plan, you will have brought your mortgage current and will no longer be in default; therefore, your lender cannot resume foreclosure proceedings at the conclusion of your chapter 13 bankruptcy.

What Can Bankruptcy Attorney Adam Garcia Do For You?

As mentioned earlier in the article, Adam Garcia can file a chapter 13 bankruptcy petition with the Santa Rosa bankruptcy court. Adam Garcia will file a confirmable repayment plan that is feasible and pays general unsecured creditors at least the value of your nonexempt property (ie. satisfy best interests of creditors test).  At the conclusion of your chapter 13 repayment plan, you will be current on your home mortgage and have saved your home from foreclosure.

To learn more about saving your home from foreclosure by filing chapter 13 bankruptcy call Adam Garcia at (707) 200-6688.