Will Filing Chapter 11 Help Stop Foreclosure?

Video Transcript

"You've fallen on hard times recently and you're not making your mortgage payments. At first they were untimely and now you're simply not making them and you don't know when you're going to be making them in the future. And you've talked to some neighbors and friends and family and they say, "Why don't you consider filing bankruptcy?" And you've heard something about chapter 11 or something like that. Which way do you go? I'm Robert Todd and I'm here to answer the question "Will filing chapter 11 bankruptcy stop mortgage foreclosure?" And the quickest answer is it can delay it, but it's not going to stop it. The only thing that stops it completely is paying off the mortgage or renegotiating the terms of the mortgage so that the mortgage lender who would be seeking mortgage foreclosure on your home stops because they're receiving payment in the form and fashion that they have agreed upon. Generally, when you are talking about renegotiating your mortgage you're talking about lowering the interest rate or extending the term, let's say from fifteen years to thirty years, which lowers your mortgage payment. Failing that, you can seek alternative financing to refinance and pay off your existing mortgage with another mortgage lender. But, one way or the other you're going to have to pay the mortgage to stop the mortgage foreclosure. Bankruptcy in its simplest terms is a way to reorganize your debt and the payment of your debt, not to necessarily eliminate your debt. Especially when it comes to mortgages. I'm Robert Todd and thank you for watching."