While Bankruptcy doesn’t lead to foreclosure, it can have an impact on one’s home. You need to consult with an experienced Bankruptcy and Foreclosure attorney to protect your home and all your assets.
Failing to make one’s mortgage payment is the most common reason for a lender to foreclose. When you file for bankruptcy, the lender will receive notice directing it to cease all collection efforts. This usually results in the bank stopping any automatic withdrawals for payment and it stops sending hard copy bills as well. The homeowner can make voluntary payments. If the homeowner mails his / her payment timely each month, or pays in person at a branch, there will be no foreclosure. It is incumbent on the homeowner to make sure the payments are timely.
Even if mortgage payments are current, there are circumstances where the Bankruptcy Trustee can take the house. Connecticut’s homestead exemption is $75,000 per person. Thus, a married couple can protect up to $150,000 in equity in their home. If the equity in the home doesn’t exceed the $75,000 per person limit, then the trustee will abandon the bankrupt estate’s interest and the home will stay with the homeowner. If the homeowner keeps the mortgage payments current there will be no foreclosure. Any homeowner considering bankruptcy should consult with an experienced Bankruptcy attorney as early in the process as possible. This is especially true if there are past due mortgage payments.
Call 203-304-9050 (877-286-3414 toll free) or contact us online to schedule your free initial phone consultation.
Bankruptcy Lawyers Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.