You might feel like your back is against the wall if you are facing foreclosure on your home. In Texas, filing for bankruptcy may provide options that allow you to keep your residence.
Bankruptcy is a legal process to help people manage or eliminate debt. For many, it offers a way to stop foreclosure temporarily and gives them time to catch up on missed payments.
Automatic stay protection
When you file for bankruptcy, the action triggers an automatic stay. This is an immediate order that stops most creditors from collecting debts, including halting foreclosure proceedings. The automatic stay can give you breathing room to work out a plan to keep your home. However, the lender may request to lift the stay, so it’s important to act quickly during this period to resolve the mortgage issues.
Chapter 13 bankruptcy
Chapter 13 bankruptcy can be a valuable option if you want to save your home from foreclosure. This type of bankruptcy allows you to create a repayment plan to catch up on missed mortgage payments over three to five years. During this period, you must continue to make your current mortgage payments on time. By following the repayment plan, you can avoid foreclosure and keep your home.
Chapter 7 bankruptcy
Chapter 7 bankruptcy could also help in certain situations. While Chapter 7 is primarily for discharging unsecured debts, such as credit card bills, it can still offer some relief if you’re behind on mortgage payments.
The automatic stay in Chapter 7 can temporarily stop foreclosure, but it doesn’t provide a long-term solution like Chapter 13. However, if you can negotiate with your lender or find another way to catch up on payments, Chapter 7 may buy you some time.
Bankruptcy isn’t a guaranteed way to save your home from foreclosure, but it can offer a lifeline. By understanding your options and acting quickly, you may be able to protect your home and find a path to financial recovery.
