How Declaring Bankruptcy Can Help Fight Foreclosure
Did you know that in the third quarter of 2012, there were 9,131 people who filed for bankruptcy in Indiana? This was a good thing for more than just Indiana bankruptcy attorneys–it was good for those who took their future into their hands by filing for bankruptcy. Many more people than you’d think have to choose this option. In fact, even celebrities like Mike Tyson, Willie Nelson, Elton John, Larry King, Jerry Lee Lewis and Anna Nicole Smith, and former Presidents Jefferson, Grant, McKinley and Lincoln have all had to declare bankruptcy.
Bankruptcy was designed to help people overcome the challenges posed by difficult financial times, such as foreclosure. Believe it or not, foreclosure in bankruptcy is a common thing. When unable to make payments on their home, people will oft choose bankruptcy as a means to keep their house.
Foreclosure in bankruptcy is a great option for people struggling, because it immediately stays the foreclosure process. Once filing for foreclosure in bankruptcy, the court immediately issues an order with what’s called the “automatic stay.” This stay directs creditors to cease their collection activities immediately, without any excuses. Foreclosure in bankruptcy will also legally postpone the foreclosure sale while the bankruptcy is pending, which typically lasts three to four months.
Apart from staying the foreclosure process, foreclosure in bankruptcy also has three other main benefits, according to legal encyclopedia Nolo. These are the ability to save money, cancel debt, and cancel tax liability for certain property loans. During foreclosure in bankruptcy, you get to live in your home for free, at least for some of the months while the bankruptcy is pending, and possibly even more once the case is closed. This allows you to be able to save money for the sake of securing new shelter. Also, since the debts to the home are cancelled, you can further save money because you won’t have to worry about those payments either.
If you have any questions about foreclosure, bankruptcy, or how the latter can help the former, feel free to ask in the comments!