Bankruptcy Vs Foreclosure
When it comes to foreclosure, some people are not sure whether they should allow that to take place, or just file for bankruptcy. It’s important to keep in mind that the decision is not an either/or decision, and as such, cannot be made lightly.
What is Foreclosure?
An act of foreclosure can occur when the mortgage lender does not receive the monthly payments they are entitled to. The only way to stop this from occurring is to pay the mortgage lender. These types of loans are like car loans, in which you would lose your car through repossession if you didn’t pay your bills. Like repossession, foreclosure will take away a person’s home if they do not keep up with the monthly payments they owe on their mortgage.
Can Filing for Bankruptcy Help Then?
For people who cannot pay their debts, sometimes they file the legal action of bankruptcy. The purpose of this action is to stop all the civil action against the debtor while the debtor is in bankruptcy. A foreclosure can be halted through these means because lender is required to cease all their legal actions against the debtor. Lenders respond by filing for relief from this order, and once they are invariably granted such relief, the legal action will continue forward and the house lost.
