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How Can Bankruptcy Prevent Foreclosure

Posted by Rory Vohwinkel | Aug 28, 2018 | 0 Comments

If you find yourself in a dire financial situation due to a lost job, medical emergency, out-of-control spending or other unexpected major expense, you'll need to make some significant changes to get back on track. Often, these types of situations may lead to missed mortgage payments, and after this occurs for several months, a notice of foreclosure.

In this case, declaring bankruptcy can prevent the foreclosure as well as buy you some time to get your finances back in order to start over again. Here are some things to consider:

Emergency Bankruptcy Petition 

If you have received a foreclosure notice, you may want to file an emergency bankruptcy petition to stop the sale. The first thing you want to determine is your exact foreclosure sale date. Usually, state law requires that the lender provide you with a certain amount of time before they can proceed with the sale.

As soon as you file for emergency Chapter 13 or Chapter 7 Las Vegas bankruptcy relief, you immediately halt the foreclosure process. As long as your home hasn't been sold, your lender can no longer continue the proceedings.

Application Process 

An emergency bankruptcy petition allows you to file quickly in order to stop the foreclosure process. However, you must complete the remainder of the forms as well as comply with all the other requirements of bankruptcy filing including credit counseling classes as part of the process.

The minimum requirements may include the petition itself, social security information, creditor information, and filing fees or waiver forms.

Chapter 7 Bankruptcy 

If you successfully file for Chapter 7 bankruptcy, you can eliminate the majority of your outside debt. During the process, you can often request that your home and car are exempt from the filing. However, if your other debt such as credit card and medical bills are eliminated, you should be able to free up enough money to hold onto important assets like your vehicle and house.

Chapter 13 Bankruptcy 

If you choose to file Chapter 13 bankruptcy instead, you will end up with a plan to repay your creditors during the next several years. Your financial situation will be scrutinized and monitored throughout the process, and some of the debt may be forgiven. As long as you make the agreed-upon payments, your lender cannot foreclose on your home while you have Chapter 13 protection.

Into the Future

It's important to remember that filing for bankruptcy is the opportunity to start over again. You will be required to take courses and undergo counseling to help you make better financial decisions to avoid such a situation in the future.

To learn more about how bankruptcy can help you keep your home, check out these online tips or make an appointment with the best real estate attorney Las Vegas to discuss the details of your particular situation.

About the Author

Rory Vohwinkel

Rory Vohwinkel began his legal career at one of Nevada's oldest and largest law firms, representing clients in commercial litigation and business transactions. Rory went on to serve as the sole in-house attorney for a national real estate investment and property management company. In 2009, Rory...

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