Foreclosure is a process. If you are available to make all of your back payments while staying financially solvent you should do so. If you can get your mortgage payment current without further assistance the foreclosure process will be immediately halt as soon as payments are current and any applicable late fee is paid.
Denver Bankruptcy FAQ:
Keeping Your Home
Bankruptcy, Mortgage, and Your Home
Avoid foreclosing on your house, and keep your home.
Are you concerned about keeping your Colorado home when you file for bankruptcy? Read the bankruptcy information, then contact Norton Law Offices to set up a free consultation.
To make property exempt, the bankruptcy filer must make sure to claim the desired items as exempt in the filing forms and properly identify each item and its value. There are limits to exemptions and allowable exemptions are specific to item types that can be considered day to day necessities such as clothing, transportation, housing, trade tools, pension, earnings, and household items.
No. Bankruptcy can put a stay on foreclosures that have not yet preceded to the repossession and sale of a home but cannot turn back the hands of time. Bankruptcy can be started as soon as it becomes apparent an individual cannot possibly repay all debts they owe, so there is no reason to wait till after your home has been repossessed to file.
If you wish to retain more than one home you must make sure you can reasonably pay the mortgages on all of the homes they own. In the case of multiple houses being keep the only option available to a debtor is usually a Chapter 13 bankruptcy.
The best way to protect your home if its equity is above $60,000 is to file a Chapter 13 bankruptcy. A Chapter 13 bankruptcy can stop pending foreclosures and allows a debtor to restructure their late fees and past due mortgage payments.
In the state of Colorado, a house with a net value of up to $60,000 can be made exempt from repossession and sale during a chapter 7 bankruptcy. The debt on the home will not be discharged and needs to be paid if an individual wants to prevent future foreclosure and repossession following discharge.
Mortgages cannot be fully discharge through any form of bankruptcy. If a filer keeps their home they will be responsible for all remaining payments. A bankruptcy may however allow a filer to build significant equity in there house through the resolution of back payments.
Filing a Chapter 13 bankruptcy will stop the foreclosure process and delinquent and back mortgage payments can be paid within a chapter 13 repayment plan, allowing the debtor to prevent foreclosure from looming following the discharge of all dischargeable debts.
Once a foreclosure is in process it is unlikely that a refinance loan will be approved by any bank. Foreclosures show up on credit reports soon after they are first initiated and most banks will not lend to someone who has recently had a home foreclosed. If a refinance is attempted as soon as financial difficulties are perceived and before mortgage payments are missed, it is much more likely to go through and can help prevent late payments and foreclosure by lowering future monthly payments.
Bankruptcy does not affect mortgages
When faced with unmanageable mortgage payments and possible foreclosure, most individuals see bankruptcy as the only option. Bankruptcy may be the best option for many debtors in extreme financial duress, but bankruptcies were not designed to discharge mortgages and when foreclosure is the issue, bankruptcy is usually not a great option. There are however many programs and options available to individuals who find themselves in situations where they are unable to make mortgage payments over the long term.
