When you bought your house, you thought your career would only continue its upward trend. You wanted a permanent place to settle down with your family. It was nice, but you knew you could afford it. Your kids settled in, getting used to their new school and making new friends.
Then things went south. Over the next few years, your work dwindled until you were making just a fraction of what you earned before. You lost clients and couldn't replace them. You ran into more competition than you expected. Changes to the market made it harder than ever to make a deal.
When you missed that first mortgage payment, you told yourself it would never happen again. But it did, just a few months later. And then again. And again. Pretty soon, you were so far behind that the lenders started threatening to foreclose on the home, thinking you'd never get caught up again.
You don't want this on so many levels. You still love the house and the neighborhood. You want to keep your kids in the same school, near the same friends. You think you can get your business clicking again. You just need some time. You need to look into all of your financial options without the threat of a foreclosure rushing closer.
Bankruptcy and automatic stays
If you file for bankruptcy, it puts an automatic stay on the foreclosure case. Essentially, the court sees cases in order of preference. The bankruptcy filing comes first. Once you get that sorted out, the foreclosure can proceed if it's still needed, but it cannot press forward immediately.
It buys you time. It means that your creditors cannot:
- Make demanding telephone calls
- Send you letters about the debt
- Take your home away from you
- Continue with legal foreclosure actions
- Try to repossess anything else that you own
The advantage of an automatic stay is not that it eliminates a foreclosure, because it doesn't. But you needed time to look into your financial options, and that's what this provides. It gives you the relief that you need at the moment, and then you can sit down and sort everything out.
After all, it may be your other debt that is really causing the problem. If you eliminate some of it or reorganize things, will that make your mortgage payments affordable again? If so, you may already be well on your way to keeping the house.
If you feel overwhelmed and you don't know what to do next, it's time to really look into all of your options. Find out exactly what steps to take and how the process can work to your advantage. Don't worry; all is not lost.