Bankruptcy, Eviction, and Forelcosure

Did you know that Bankruptcy can stop an eviction or foreclosure?

Eviction and foreclosure moratoriums are lifting around the country.  Many wonder what options are available for individuals facing these difficult circumstances.

Bankruptcy is one available tool to prevent eviction or foreclosure.  Bankruptcy can also assist with debt relief after an eviction or foreclosure has already occurred.

Here are a couple of scenarios for how bankruptcy can help with eviction and foreclosure:

    1. Scenario: You are facing eviction and do not plan to stay in the home.

      In this situation, you likely owe your landlord money for unpaid rent and other penalties. If you do not pay this debt, then the landlord can hire a collection agency or lawyer to collect the debt. They can even file a lawsuit to obtain a collections judgment against you.
      Bankruptcy can help with unpaid rent and other associated debts. These debts are eligible for discharge in Chapter 7 bankruptcy or Chapter 13 bankruptcy.

    2. Scenario: You are facing eviction and would like to stay in the home.

      You may be eligible for Chapter 13 bankruptcy.  In a Chapter 13 bankruptcy, you are on a payment plan to pay certain debts back over a 3-year or 5-year term. In this situation, you would be required to set up your Chapter 13 payment plan so that the arrears owed to your landlord are paid off through your case. You are also required to make your future rent payments on time.

    3. Scenario: You are facing foreclosure and would like to get current on your mortgage and stay in your home.

      Chapter 13 may be your best option.  Your Chapter 13 payment plan will stop the foreclosure process and pay off your mortgage arrears through your bankruptcy payment plan.  To prevent future foreclosure proceeding, you must also timely pay your monthly mortgage moving forward. If successful, then your mortgage will be current, and risk of foreclosure resolved when your 3-year or 5-year payment plan term concludes.

    All of these situations are very technical, time sensitive and case specific.  If you are facing eviction or foreclosure, then you need to contact a lawyer ASAP if you would like to explore options to protect your rights and your home.

    The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

    We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.