For Texas consumers who are facing the loss of their home, the situation can feel overwhelming. It can be difficult to know where to start in addressing the issue, and many people simply throw their hands up and walk away from their home. There are options, however, that can buy a family the time they need to restructure their finances and postpone foreclosure.
Filing for Chapter 7 bankruptcy will put an immediate end to the foreclosure process. Once the paperwork has been filed, it is important to notify the mortgage lender. The lender then has to file a motion with the court to demonstrate that there is standing to remove the foreclosure process from bankruptcy protection. This hearing is usually held around 30 days after filing.
Once the judge signs that Order, the bank will schedule the home for sale. In most cases, the bank already has a backlog of other homes that need to be sold, and will simply add your property to the next batch of sales. The homeowner should then contact the bank and ask about any available relocation services. In some cases, banks are willing to pay homeowners to vacate the home without having to be evicted.
This process is effective in stalling a foreclosure, but will only serve to buy a small amount of time for the family to make other housing arrangements. Filing for bankruptcy is a serious event, and should not be done for the sole purpose of delaying foreclosure. Texas families who are struggling under heavy loads of consumer debt can receive a great many more benefits from a bankruptcy filing and should make an effort to determine how the process can work in their unique situation.
Source: Fox Business, File Bankruptcy to Stall Foreclosure?, Justin Harelik, Oct. 2, 2013
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