It is probably fair to assume that a bank does not want to foreclose on your property — especially in a challenging economy. Having said that, banks will initiate foreclosure proceedings to recover money that is owed to them. If you are worried about foreclosure, it might be time to consider filing for bankruptcy to stabilize your financial future. Or, if your house has significant equity and you need to stop a sheriff sale or foreclosure on that property to save it, filing bankruptcy is a way to accomplish that goal. This will give you time to evaluate your options and either sell the property under reasonable conditions and over a normal period or restructure the mortgage debt over the life of a plan of reorganization.
At Scura, Mealey, Wigfield & Heyer, LLP, our New Jersey bankruptcy foreclosure attorneys have the knowledge and experience necessary to successfully guide our clients through the difficult times they are facing. Whether you are concerned that foreclosure might become a reality or you have received a foreclosure notice from your lender, we can provide the honest answers you need in order to make decisions for your future. Depending on your situation, we can help you prevent foreclosure, or handle it once the process is in motion.
Foreclosure in Bankruptcy
Chapter 7, Chapter 13 and Chapter 11 approach foreclosure from different angles.
- Chapter 7 seeks to eliminate all or most of your unsecured debt. A mortgage, however, is secured. It might be possible to eliminate the underlying debt, giving you the flexibility to pay off the lien as soon as possible. Additionally, if you decide to "let the house go," the remaining debt on the mortgage can be eliminated.
- Chapter 13 is a debt repayment plan. Filing for Chapter 13 can give you the flexibility to catch up on any mortgage arrears by including them in the repayment plan. In some situations, a second mortgage can be stripped off a home through Chapter 13. On investment properties, first mortgages can also be restructured with more favorable terms.
- Chapter 11 is a debt repayment plan for businesses. Individuals can also file a Chapter 11 if their debt is over a certain level, or because of strategic reasons you can pay a mortgage over a longer period of time in a Chapter 11. In a Chapter 13 you are limited to 60 months or five years in your payment plan whereas in a Chapter 11 you do not have that limitation depending on the type of property.
We understand that every situation is different. Do not hesitate to schedule a free consultation with a lawyer at our firm.
Contact Our Firm
If you have questions about bankruptcy foreclosure, do not hesitate to schedule a free consultation with an attorney at Scura, Mealey, Wigfield & Heyer, LLP. Our bankruptcy attorneys can examine your financial situation and provide valuable legal advice and representation no matter how complex your question.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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