Foreclosure is one of the scariest prospects for a homeowner. The idea of losing your home and being forced out can be terrifying.
Unfortunately, this fear is something all too common for New Jersey residents. In fact, New Jersey has the highest foreclosure rate of any state in the country. For anyone facing the possibility of foreclosure, the question arises: Is there anything you can do to stop this process and keep your home?
Asking the right questions
For some people, the house they are in or the mortgage rates they are paying, are just too much. If you are in a house that you can’t afford even under the best of circumstances, you might want to consider downsizing anyway. Mortgage lenders often approve loans that are way too high for the reality of people’s lives and the monthly financial obligations they are carrying.
However, this is the exception. For most people, sudden medical bills or other expenses, job loss or other financial hardships are the primary reason for falling behind on mortgage payments. If you are in this situation, what can you do?
One solution that many people use for avoiding foreclosure is a Chapter 13 bankruptcy. While Chapter 13 does not liquidate debt in the same way as a Chapter 7 bankruptcy might, Chapter 13 does allow for a reorganizing of debts. This can allow you to shift debts around, eliminate some unwanted debts and give you enough financial room to catch up on your mortgage.
Chapter 13 provides an automatic stay, which stops collectors from continuing their collections work until the proceedings are over. Further, Chapter 13 can allow you to create more reasonable payment plans on your debts, which can minimize your monthly obligations.
These factors can help you get back on top of your debts and expenses, which could save your home from foreclosure.
Is Chapter 13 bankruptcy the right choice for you?
Chapter 13 is not for everyone. You’ll need to make sure that you have the income and the right types of debt that would make Chapter 13 a smart choice.
The best thing to do is talk with an experienced attorney in New Jersey who can help you save your home.