Can a Mortgage Company Still Foreclose on Me If I'm Undergoing Chapter 13 Bankruptcy?


Filing for Chapter 13 bankruptcy can be very tempting for a homeowner who is facing foreclosure. Bankruptcy lawyers often bombard homeowners with advertisements that claim filing for bankruptcy can save their home. However, the majority of homeowners who do file for bankruptcy to avoid foreclosure are often blindsided when the foreclosure still proceeds while they're also in the middle of dealing with bankruptcy.

Once you file for Chapter 13, all your creditors (including your mortgage company) are put under an "automatic stay." This means that they can't take collection action against you. If you fail to still make your monthly mortgage payments or don't pay the monthly bankruptcy court payment, you'll be faced with a "motion for relief from stay." This is from the mortgage company that asks the bankruptcy court to "lift" or "relieve" the automatic stay so they can foreclose on your home. Basically, Chapter 13 doesn't do very much immediate good. You still have to make mortgage payments and, on top of that, pay for bankruptcy court, BUT there is a possibility it could prevent you from losing your home.

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In conclusion, filing for Chapter 13 is mainly only beneficial if you can have the financial means to make monthly mortgage AND bankruptcy court payments as well as various other debts you may have. If you cannot afford to make all those payments then Chapter 13 bankruptcy would be futile. You should meet with an experienced foreclosure and/or bankruptcy attorney to thoroughly discuss your options and which one is the best for you.


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