It’s important to understand that the bankruptcy filing will not stop the foreclosure completely – it simply puts the foreclosure process “on hold” while you use the federal legal system in defense against your creditors.  If you decide not to follow-through with an actual bankruptcy court case (you are just filing the petition), then filing for bankruptcy will “buy you” about 60-90 days of time to save your home from foreclosure.  If you can successfully sell your home during this 60-90 day time period (and generate enough income to pay-off the loan), then you may be able to avoid foreclosure.  Filing a bankruptcy petition to save your home from foreclosure should be considered a “last resort” solution.

What happens to your home if you decide to move forward with a bankruptcy court case?  In this situation, the outcome will depend on whether you filed for Chapter 7 or Chapter 13.  In a Chapter 7 bankruptcy, you can typically discharge a mortgage; however, the bank will get to keep the home as satisfaction of the debt.  In a Chapter 13 bankruptcy plan, you will follow a scheduled repayment plan to get caught up on your debts.  Unfortunately, bankruptcy judges cannot lower mortgage balances or negotiate terms, so you will be required to pay back the total amount in arrears, plus continue making regular monthly mortgage payments.  If you are able to make it through the 3-5 year bankruptcy repayment plan, then you will save your home and be current on the mortgage loan.

Remember that if you fall behind on making your payments (according to the bankruptcy plan), the bank will have the “automatic stay” lifted and your home will be put back into foreclosure.  Before filing for bankruptcy to stop a foreclosure proceeding, consult with an experienced bankruptcy attorney.  A bankruptcy attorney can assess your financial situation, and determine whether filing for bankruptcy would be advised to stop a foreclosure.

The foreclosure process has several stages, in which the homeowner has the opportunity to bring the loan current and avoid foreclosure.  Typically, after three months of missed payments, the lender issues a Notice of Default to the borrower, informing him that he is facing foreclosure.  This notice is public record – and is recorded at the county recorder’s office. The Notice of Default starts a reinstatement period that usually runs until five days before the home/property is auctioned off. If the mortgage loan is not brought current within three months, a foreclosure sale date is determined.  The borrower will receive a Notice of Sale, and this notice will be posted on the property and recorded at the county records’ office.

Assuming the mortgage default is not corrected, the home/property will be auctioned off on the county courthouse steps.  The time and location of the auction are listed in the Notice of Sale.  The property is sold to the highest bidder at the auction, and the winner must pay the winning bid in cash.  Usually the winning bidder pays a cash deposit upfront, with the remainder due in 24 hours.  Once full payment is received, the winner receives a deed to the property. At the auction, if the property does not sell (or if the opening bid is not met), then the property is classified as an REO – Real Estate Owned.  Many REO properties available for sale at foreclosure auctions are worth much less than the total amount owed to the lender/bank.

If you are facing foreclosure, consult with an experienced attorney who can explain what options you have to halt or stop foreclosure.

If you are falling behind on payments for a car, truck, boat, motorcycle or other high-value piece of property, you could be facing repossession. Your creditors can repossess your property at any time, and once they do, you may have no remedies available to get them back. You should act rapidly to avoid repossession.

Put an Immediate Halt to Repossession: The Automatic Stay

When you file for bankruptcy in San Antonio, the courts will issue an “automatic stay.” The automatic stay is an order that forbids creditors from contacting you or taking any actions toward collections, which includes repossession. Upon filing for bankruptcy, the automatic stay means your creditors will stop calling you for payments. The automatic stay may also give you time to catch up the back payments.

How Chapter 13 Bankruptcy Stops Repossession

Chapter 13 bankruptcy allows you time so that you can catch up on back payments called “arrears.” It also puts an automatic stay on repossession and other attempts at collection, giving you the necessary time to catch up on back payments.

Most arrears will be paid towards secured debt — that is, debt on assets that you own or that were put up as collateral. Most unsecured debts can be discharged through a Chapter 13 bankruptcy.

To learn more about bankruptcy in the San Antonio area, you can schedule an appointment for a free initial consultation with one of the members of our legal team. Just call (210) 807-4252 or contact our offices online.

In some cases, bankruptcy can be used to prevent foreclosure. Other times, it may not. If you are thinking about bankruptcy and fear your home is in danger of foreclosure, call a local San Antonio bankruptcy lawyer at our firm now for assistance.

What if You Receive a Foreclosure Notice?

If you have received a foreclosure Summons Complaint alerting you that your house is in foreclosure, you may be able to prevent it if you act swiftly. Although you are not allowed to restructure the terms of the mortgage, you may ask the bank for leniency for time to catch up on your back payments, also known as “arrears.”

Most banks prefer not to foreclose on your home — especially in today’s economy — but the bank needs a reason to believe you will make your mortgage payments. If all your other debts are discharged or consolidated through bankruptcy in San Antonio, then the bank has a reason to believe you will be able to make the payments.

Foreclosure in Chapter 7 Bankruptcy

In Chapter 7 consumer bankruptcy, the majority of your unsecured debts are forgiven. A mortgage, however, is a secured debt. While the underlying debt on a home or real property is discharged or forgiven the lien remains on the property and can still be foreclosed by the lender or lending institution. Foreclosure permits the bank or lending institution to take back title to the property. If the home or real property is surrendered in a chapter 7 bankruptcy all your existing debt owed on the mortgage will be discharged even if the value of the house is less than the value of the debt.

Foreclosure in Chapter 13 Bankruptcy

If you are in foreclosure, filing for Chapter 13 bankruptcy in San Antonio may allow you to catch up on your back payments and reinstate your mortgage. Even if you have already been served a Summons Complaint, you can file for Chapter 13 bankruptcy to prevent foreclosure at any time before the bank’s auction to sell your house takes place.

In these times more than any other since the Great Depression, Americans are being turned out of their residences. Many foreclosures are the result of economic struggles and predatory lending — not fiscal irresponsibility. If you are facing foreclosure and bankruptcy in San Antonio, our local bankruptcy attorney in San Antonio can help you through it.

To learn more about bankruptcy in the San Antonio area, you can schedule an appointment for a free initial consultation with one of the members of our legal team. Just call (210) 807-4252 or contact our offices online.