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Frequently Asked Questions (FAQs)

Will bankruptcy stop a foreclosure?

Yes and No… A home is an asset usually secured by a deed of trust. The mortgage company is entitled apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy. Depending upon several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. Usually, to keep a home that is in foreclosure you will have to make a deal with the Mortgage Company. This is the key, you still must work something out with the Mortgage Company to repay the past due amount. This is why we say filing for Bankruptcy is like putting a band aid on a bullet wound… it may help you at first but major surgery is still required.


The Bottom line is that Bankruptcy may buy you a small amount of time but negotiations will still need to be made with the Mortgage Company to enable you to keep your home. Most people who file Bankruptcy to save heir home from Foreclosure wish they had not because in most cases they are in a worse position that when they started. Filing Bankruptcy removes your leverage and places your fate in someone else’s hands. Your best option is for you to stay in control, and allow NHS to work something out for your prior to filing

Pros for filing Bankruptcy to Stop Foreclosure

  • The Foreclosure proceedings will be temporarily suspended.

Cons for filing Bankruptcy to Stop Foreclosure

  • There will be a bankruptcy on your record for 10 years.
  • The Mortgage Company can work around the Bankruptcy and still Foreclose.
  • You lose any leverage and control you once had.
  • A deal must still be worked out with the Mortgage Company to repay the past due amount.
  • If you are 1 day late on any trustee payments your case "may" be dismissed, the stay will be lifted and you will be back in Foreclosure.
  • NHS can negotiate on your behalf with the Mortgage Company to keep your Home from Foreclosure and get your loan back in good standing.

We are not attorneys and in no way are giving you legal advice. We are only attempting to explain how Bankruptcy may affect Foreclosure in our opinion. You must consult a local attorney to discuss your case as it concerns Bankruptcy.

 

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