Hard financial times can befall just about anyone in Indianapolis. All it takes is a job loss, a serious illness, divorce or other major life event that causes you to take on unmanageable debt. You may even find you can no longer make your mortgage payments and are now facing foreclosure. That can be frightening. After all, no one wants to lose their home. Fortunately, there are options for dealing with foreclosure, including filing for bankruptcy.
Bankruptcy and foreclosure
If you choose a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, once filed the bankruptcy issues an automatic stay on any collection actions, including foreclosure. This could give you the time and breathing room necessary to come current on your mortgage payments or make alternative living arrangements. In addition, once the bankruptcy process is complete most (but not necessarily all) of your debts are discharged whereas at the end of the foreclosure process you may still owe money to your lender if the foreclosure sale is not enough to cover what is owed.
Lifting the automatic stay
One thing you should be aware of if you are considering bankruptcy is the fact that the lender can file a motion to lift the automatic stay. This gives them the opportunity to continue with foreclosure proceedings. This is significant as a foreclosure can be a greater hit to your credit than bankruptcy, which could jeopardize your housing options.
Ultimately, you will want to make sure to research all your rights and options if you are facing the loss of your home. While these can be tough decisions to make, being informed on bankruptcy and its advantages and disadvantages can help you make decisions that are in your best interests.