Debt Consolidation Credit Counseling In Phoenix

Bankruptcy is a scary procedure to undergo, and some wonder if they should simply allow a mortgage foreclosure to take place instead. Few people realize how difficult the choice is to make, or recognize that the decision is not an either/or one. An act of foreclosure can occur when the mortgage lender does not receive the monthly payments they are entitled to.

Paying the lender is the only true way this action can be prevented. A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. In a similar vein, if a person is lax in their monthly mortgage payments, they will experience losing their home via foreclosure.

If a person's debt is so bad that they cannot pay their debts, then they sometimes must file bankruptcy. This action stops all civil proceedings against the debtor while the debtor is in bankruptcy. A foreclosure can be halted through these means because lender is required to cease all their legal actions against the debtor.

Once they are granted such relief, they will continue with their legal actions against the home buyer. In other words, no, bankruptcy will not stop foreclosure - the only way to do this is to make payments to your lender. The only thing that bankruptcy can do is slow down the inevitable process.

Occasionally, however, foreclosure is prevented through bankruptcy, as the latter gives person additional time in which to pay the lender and usually makes the paying easier. As bankruptcy makes a mortgage lender temporarily cease a foreclosure action, a debtor has additional time to raise money to pay the lender. The debtor may also have have several of their other debts eliminated due to bankruptcy, so they are able to have additional money available to pay their mortgage. In terms of a chapter 13 bankruptcy, the courts will dictate that the payment of the overdue mortgage needs to be paid through several payments, which will further give the debtor time to pay the lender off.

In order to file for bankruptcy, you must first qualify - which not everyone does - and even if you do, you will be faced with large legal fees. Legal bills can be quite high, and high enough that they outweigh the costs of catching up with the mortgage. If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. No one should attempt a complicated legal process like bankruptcy without legal aide. This article is only intended to give general information, so for more detailed information, contact a lawyer in your state.