Bankruptcy stops foreclosure, pure and simple. Prior to a sale a bankruptcy filing causes the automatic stay to be implemented and no sale or foreclosure can take place for a period of time. During this period we work with the client to modify their mortgages so that they can capitalize any amounts owed and reduce the monthly payments. In a Chapter 13 bankruptcy the Southern and Eastern Districts of New York have a loss mitigation program that allows loan modification supervised by the bankruptcy judges. This program works very well for those individuals that want to keep their house.
In a Chapter 13 the homeowner has the absolute right to repay arrearage over 60 months while making their current loan payments. Not many homeowners can do that without assistance from another family member.
While a loan modification outside of bankruptcy court can have better results with the arrearage being capitalized, the banks are so hard to work with and modifications are routinely denied. When we go back and ask why, we find that many times the banks have made mistakes in inputting information. There response; however, is, "you can reapply". Consequently we end up reapplying two or three times for many of our clients until our clients get approved. If you are in risk of losing your home due to foreclosure and would like to see if filing for bankruptcy is an option for you then please call a Westchester County bankruptcy lawyer at 914-827-5238 today. By contacting a member of our firm you will be taking your first step to financial stability. Don't hesitate to consult with a member of our legal team today.
