How to Beat Foreclosure Through Bankruptcy
Facing foreclosure is difficult. Nonetheless, the fact that your home mortgage lender is pursuing a foreclosure case against you does not mean that you are defenseless. There are a number of strategies that you can employ in order to protect your interests in a foreclosure proceeding. The fact is that you might even be able to beat foreclosure through bankruptcy.
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Instructions
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Prepare a bankruptcy petition. You can obtain the standard forms you need for this task from the clerk of the bankruptcy court.
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Designate your residence as a homestead within the bankruptcy petition. Your homestead is exempt property that will be protected through the bankruptcy process.
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Fill out the matrix of creditors form. The matrix is another standard document available to you at the bankruptcy clerk's office. The matrix is a list of all of your creditors, including your home mortgage lender.
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File the petition, matrix of creditors and supporting documentation with the clerk of the bankruptcy court. The moment you file your petition for bankruptcy, the court issues an "automatic stay." The automatic stay is an order of the bankruptcy court requiring your creditors to stop all efforts to collect debts you otherwise owe. The creditors can take no further action against you absent a specific order from the bankruptcy court granting permission for them to do so. The foreclosure case is frozen at this time.
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Negotiate a reaffirmation agreement on your home with the mortgage lender. Because your residence is homestead property, you have the option to keep the property in the bankruptcy case provided you enter into a new loan agreement with the mortgage lender. The reaffirmation agreement is the technical name in bankruptcy for that type of loan agreement.
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