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Michael D. Hart, P.C.
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540-627-6520
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Bankruptcy can help forestall foreclosure

The subprime mortgage crisis is still fresh in the memory of many Virginia residents. Thankfully, the nation has recovered from the various factors that aligned to create that situation. However, it is not unusual for families to be living paycheck to paycheck and one unexpected downturn away from financial disaster. Too often, homeowners simply give up and do nothing, but there may be options available even in the most dire of circumstances.

When faced with the reality of issues such as foreclosure and bankruptcy, there may be no good choices. However, it can be said that there are certainly less bad options. Financial experts point out that home foreclosure does not begin immediately when one mortgage payment is missed. Each lender has different protocols and procedures. Furthermore, there is the possibility that the homeowner can negotiate some compromise agreement that precludes or delays foreclosure. When that is not possible, filing for bankruptcy can provide some breathing room.

Following a bankruptcy filing, the court issues an Order for Relief that requires any creditors to immediately cease collection attempts. This includes foreclosure proceedings, which are thereby automatically stayed; although, there are some exceptions. The homeowner then has until the bankruptcy is finalized to see if there is any way to save the home or negotiate a surrender of the home in the least damaging way possible. Those who qualify for Chapter 13 bankruptcy may be able to save a home by setting up a repayment plan.

While no one should seek bankruptcy protection lightly, it is the best option under certain circumstances. A bankruptcy lawyer can offer counsel and advice in determining which form of bankruptcy may be appropriate to provide a fresh start.

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Michael D. Hart, P.C.
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Roanoke, VA 24011

Phone: 540-627-6520
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