Facing home foreclosure can be scary for a Colorado family. The prospect of losing one’s home can weigh heavily on a person who faces uncertainty regarding where to move their spouse and children. When foreclosure becomes a possibility in their life, they may explore their legal options for protecting their residence and the equity that they have built in it.
One option that they may look into to stop home foreclosure is bankruptcy. Both Chapter 7 and Chapter 13 bankruptcy may serve the purpose of halting the foreclosure process in its tracks. That is because in personal bankruptcy an automatic stay is put into place to cease all creditors’ actions from collecting what they believe is due to them.
Beyond the automatic stay, which may only last for a few months, Chapter 13 bankruptcy may provide the most viable solution for letting a person keep their home after falling into arrears on their payments. Through the Chapter 13 repayment plan a debtor may make a plan to manage their mortgage debt and lower their monthly payments so that they can successfully make them into the future.
Before filing for either Chapter 13 or Chapter 7 bankruptcy to cope with one’s pending home foreclosure, a person should consider speaking with a legal professional about what other requirements and consequences may attach if they choose to pursue personal bankruptcy. Other options may exist to stop home foreclosure from turning a family out onto the street due to missed or late mortgage payments, which is why discussing these matters with a competent legal professional may prove beneficial.