Foreclosure is a term that tends to frighten people. When you stop making payments on your mortgage, you put yourself at risk of foreclosure. During this process, your lending institution tries to reclaim the money it originally lent you by taking control of your home or property. Typically, the bank or agency will seize your house and then sell it in order to regain its losses.
However, if you are able to repay the debt you owe, then the foreclosure process will be halted. Filing for bankruptcy is also another method of stopping your bank from foreclosing on your house.
There are two main ways of preventing foreclosure. The first is to completely pay off the debt you owe on your mortgage. If you do this at any time during the foreclosure process, prior to the sale of your home, then you will be given back your property.
You can also stop the foreclosure process by filing for Chapter 7 or Chapter 13 bankruptcy. Once your bankruptcy filing goes through, all foreclosures and repossessions must be halted. Although it is not a state law, some mortgages do require for lenders to give their borrowers a heads up several days to weeks before foreclosing on their homes. In these cases, you can prevent the foreclosure process from happening by filing for bankruptcy.
If you would like to learn more about how filing for bankruptcy can protect you from foreclosure, then Birmingham bankruptcy lawyer Paula Greenway can help you. Contact her at (205) 324-4000 to schedule your free initial consultation today.