We have been talking about Atlanta’s Morris Brown College, which filed for bankruptcy last week after facing a potential foreclosure auction of several properties on its campus.
Last month we discussed a couple who faced foreclosure because of an unpaid $140 sewage bill, and how they almost filed for bankruptcy because of liens placed on their property. Although the couple worked out a settlement with their creditor, a foreclosure would’ve helped them out the same way it’s helping Morris Brown College.
Through a Chapter 11 bankruptcy filing, Morris Brown College has stopped the foreclosure process. Similarly, a struggling homeowner could file for Chapter 7 or Chapter 13 bankruptcy and stop a foreclosure. A bankruptcy filing generates an automatic stay that prevents creditors from taking action against you to collect debts. This process can take several months and give you the time you need to renegotiate the terms of your mortgage with your lender.
If you are facing foreclosure, speak to an experienced bankruptcy attorney. The timing of a bankruptcy filing is important for people facing foreclosure, as states have various laws that place that limit the number of days that can pass before a foreclosure sale can take place. Often, it is in the best interest of the person struggling financially to wait until shortly before a foreclosure sale is scheduled to file for bankruptcy, as the process can extend the amount of time they can stay in their home.
It should be noted that bankruptcy also allows you to discharge unsecured debt like medical bills and credit card debt, which can help you save money to make past due mortgage payments. If you have questions regarding bankruptcy, talk to our attorney. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.