Are you behind on your mortgage payments and worried about losing your home? You’re not alone. The good news is that filing for bankruptcy can provide immediate relief and help stop home foreclosure.

Bankruptcy might sound intimidating, but it’s often the most effective way to halt foreclosure proceedings and give you the time or structure needed to save your home.

Here’s how Chapter 7 and Chapter 13 bankruptcy can make a difference.

How Bankruptcy Stops Foreclosure

When you file for bankruptcy, an automatic stay takes effect immediately. This court order stops all collection actions, including foreclosure proceedings. Your mortgage lender must pause foreclosure while the bankruptcy is active.

The automatic stay gives you breathing room to decide your next steps and explore options to keep your home. However, the way bankruptcy works depends on whether you file under Chapter 7 or Chapter 13.

Chapter 7 Bankruptcy and Foreclosure

Chapter 7 bankruptcy is known as “liquidation bankruptcy.” It helps discharge unsecured debts, like credit card balances or medical bills, freeing up your finances to focus on your mortgage.

Here’s how Chapter 7 impacts home foreclosure:

  • Temporary Relief:The automatic stay stops foreclosure temporarily. This gives you a few weeks or months to negotiate with your lender or prepare for the next steps.
  • Secured Debt:Mortgage debt is considered “secured,” so Chapter 7 does not eliminate your obligation to pay it. If you can’t catch up on payments, the lender may resume foreclosure once the bankruptcy case ends.

Who Benefits Most? If you have little income, few assets, and want to eliminate other debts to focus on your home, Chapter 7 could help.

Chapter 13 Bankruptcy: The Best Option to Save Your Home

Chapter 13 bankruptcy allows you to reorganize your debts into a manageable repayment plan over three to five years. It’s the most powerful tool to stop foreclosure and keep your home.

Here’s why Chapter 13 works for homeowners:

  • Catch Up on Payments:You can include your missed mortgage payments in your repayment plan. This allows you to spread past-due amounts over several years while staying current on future payments.
  • Automatic Stay Protection:As long as you stick to your repayment plan, the lender cannot foreclose on your home.
  • Restructure Other Debts:By managing credit cards, car loans, and other debts in the plan, you free up income to focus on your mortgage.

Who Benefits Most? Chapter 13 is ideal for Texans with regular income who have fallen behind but can afford to repay over time.

reorganize your debts

Act Quickly to Stop Home Foreclosure Lawsuit

Timing matters when it comes to stopping foreclosure. Filing for bankruptcy before the foreclosure sale is critical to trigger the automatic stay. Waiting too long can limit your options and make saving your home more difficult.

If you’re facing home foreclosure in Texas, don’t wait until it’s too late. Legal options like debt relief law firms can protect your home and your future.

The Law Office of Joel Gonzalez is here to help you understand how bankruptcy can save your home. Our bankruptcy lawyer in Beeville, Victoria, or Alice provides top-level, professional services. Contact us for a free consultation and let us guide you through the best solution for your situation.