Can Bankruptcy Stop a Foreclosure in Florida?

Home during foreclosure

Foreclosure is a scary process for many reasons. It is confusing, and you may not understand what is happening until it is too late.

When the foreclosure process begins, your real estate, which is often your family home, is at serious risk of being taken away from you. In some cases, this may mean that all of the money and work that you put into your house could vanish within just a few short months.

Believe it or not, filing bankruptcy may be a good solution. Bankruptcy can stop a foreclosure in Stuart, Florida, and it may be an option if you are facing an impending foreclosure proceeding.

What Is an Automatic Stay in Stuart, Florida?

When you file for bankruptcy, an “automatic stay” goes into effect the moment you file. This stay pushes the pause button on various collection actions, including:

  • Garnishments
  • Bank levies
  • Property seizure
  • Placing additional liens on the property
  • Repossession

Any collection attempts that are currently in progress must stop when you file bankruptcy.

The automatic stay will also stop foreclosures. It can even stop the sale of your home at auction, which only happens after you go through the foreclosure process.

The automatic stay is one of the immediate benefits of filing bankruptcy. When used correctly, it can be a great vehicle to help you work out payment arrangements and get control of your financial life.

However, it’s important to remember that the automatic stay is just a temporary solution. It does not cancel the foreclosure, but you may gain some extra time to determine how to address your lender’s demands and potentially keep your home.

Chapter 7 Bankruptcies and Foreclosure in Stuart, Florida

The U.S. Bankruptcy Code is organized by chapter. Several chapters cover different types of bankruptcies.

A Chapter 7 bankruptcy is a liquidation. In this type of bankruptcy, a trustee with gather all of your assets (as long as they are not exempt under federal or Florida law), value them and sell them to pay your creditors.

Most lenders will request that the automatic stay be removed or “lifted” in order to complete the foreclosure proceeding on your property in a Chapter 7 bankruptcy. These types of requests are often automatically granted because your bank or another lender will almost always meet the requirements of the bankruptcy code to accomplish lifting the stay.

In those situations, you might be able to work with your lender to develop a payment arrangement that works for all parties involved. You should work with a Stuart, Florida bankruptcy attorney to help you with this process.

Chapter 13 Bankruptcy and Foreclosure in Stuart, Florida

Another type of bankruptcy that you can file is under Chapter 13. This chapter is specifically designed for individuals to restructure their debt and make payments over a period of three to five years. You must have a steady income to use this type of bankruptcy.

Under a Chapter 13 bankruptcy, you are most likely able to keep your home. You can structure your overall debt payments so that you can continue to make your normal payments on your house and even catch up on missed payments. In some rare cases, you might also be able to reduce your interest rate as part of this process.

If keeping your home is your goal, then a Chapter 13 bankruptcy maybe your best option. As always, it’s important to speak with a bankruptcy attorney in Stuart, Florida for help, guidance, and assistance with answering your questions and navigating the legal process.

How to Stop Your Foreclosure

If you are looking for options to stop the pending foreclosure process on your home, then bankruptcy might be the right choice for you.

Your Three Steps to Moving Forward

Call our office, use our live chat, or complete our contact form and set up an intake call with our Client Happiness Coordinator.

Attend a virtual or in-office consultation so we can better understand your case and determine how we can help guide you to success.

Retain our firm so we may lead you through the legal process as quickly and painlessly as possible.

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