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

Put an Instant Halt to Repossession: The Automatic Stay

When you file for bankruptcy, the courts will issue an ”automatic stay.” The automatic stay is an order that forbids your creditors from contacting you or taking any actions toward collections, including repossession. Once you file for bankruptcy, the automatic stay means your creditors will stop calling you for payments. The automatic stay may also allow you time to catch up the back payments.

How Chapter 13 Bankruptcy Stops Repossession

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

Most arrears will be paid towards secured debt — that is, debt on assets that you own. Most unsecured debts can be discharged through Chapter 13 bankruptcy.

To learn more about bankruptcy in the Austin, Georgetown, Leander, or Round Rock area, you can schedule an appointment for a free initial consultation with one of the members of our legal team. Just call 512-992-2421 or
contact our offices online.

In some cases, bankruptcy can be used to help prevent foreclosure. Other times, it cannot. If you are thinking about bankruptcy and fear that your home may be in danger of foreclosure, call our legal team 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 stop it if you act swiftly. Although you are not allowed to restructure the terms of your mortgage, you can ask the bank for leniency for time to catch up on your back payments, also known as “arrears.”

The bank would prefer not to foreclose on your home — especially in today’s economy — but it needs a reason to believe you will make your mortgage payments. If all your other debts are discharged or consolidated through
bankruptcy, 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, most of your unsecured debts are forgiven. But, a mortgage is a secured debt. While the underlying debt on a house or real property is discharged or forgiven the lien remains on the property and can still be foreclosed by the bank or lending institution. Foreclosure allows the bank or lending institution to take back title to the property. If the house or real property is surrendered in a chapter 7 bankruptcy all your remaining 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 may help you 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 stop foreclosure at any time before the court 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 homes. Most foreclosures are the result of economic struggles and predatory lending — not fiscal irresponsibility. If you are facing foreclosure and bankruptcy, we can help you through it.

To learn more about bankruptcy in the Austin, Georgetown, Leander, or Round Rock area, you can schedule an appointment for a free initial consultation with one of the members of our legal team. Just call 512-992-2421 or or contact our offices online.