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Bankruptcy may help when facing foreclosure

At some point in our lives, most of us face financial problems. Whether due to an unexpected medical condition, the sudden loss of a job, or financial mistakes, these matters can quickly snowball, leaving individuals overwhelmed. They might lose sleep and despair for their future. This can be especially true when one's home is on the line.

Foreclosure and the thought of homelessness can be terrifying. Many Wisconsinites do everything they can to avoid it, including selling off assets, taking on additional work, and, perhaps, borrowing from other sources at high interest. Despite their efforts, far too many individuals wind up still being foreclosed on and are left to deal with their lost assets and newfound debt from the loans they took out in an effort to save their home.

Yet, those who face overwhelming debt and the threat of foreclosure do not have to take such measures. Instead, they can file bankruptcy. Though "bankruptcy" is a scary word in itself, filing for bankruptcy, either Chapter 7 or Chapter 13, places an automatic stay on foreclosing procedures, which can buy a homeowner up to several months to find a way to avoid foreclosure. This may allow the homeowner to find a new, better job and/ or seek assistance from family members.

It is worth noting that in some instances the automatic stay will not go into effect. One of these situations is when the foreclosure has already been filed. This means that those whose homes are on the line need to act in a timely fashion. Discussing the matter with an experienced bankruptcy attorney may be beneficial and help those overwhelmed with debt better understand what options are open to them.

Source: FindLaw, "Facing Foreclosure? How Bankruptcy Can Help," accessed on Sept. 21, 2015

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