Chapter 13 bankrupcy

When an individual falls behind of their mortgage payments, their mortgage company will take actions to collect that debt. One of the most common tools that mortgage companies use is called foreclosure. Individual situations may vary, but the basics are the same. The mortgage company sells the property at a public auction. The homeowner has no control over the sale and may loose all of the equity that has accumulated in the property. A foreclosure sale is rarely in the best interest of the homeowner. Fortunately, there are ways to avoid the foreclosure even if the homeowner does not have adequate funds to bring the loan current. The first step should be to contact the mortgage company to explore any available options if the homeowner wants to keep the property. If there are no realistic options for the homeowner, they may prevent the foreclosure sale by filing a for bankruptcy. Usually, a Chapter 13 Bankruptcy is used to allow the homeowner to catch up the missed mortgage payments over time. One important benefit of a Chapter 13 Bankruptcy is that the property does not need to have any equity. The other is that the homeowner will not loose the equity that has accumulated.

Foreclosure

The word "Foreclosure" means to shut out, to bar; to terminate. The word "foreclosure" means the proces by which a mortgagor of real or personal property (or the other owner of property subject to a lien) is deprived of his or her interest therein; a proceeding in equity whereby a mortgagee either takes title to or forces a sale of the mortgagor's property in satisfaction on a debt. (Black's Law DIctionary, 646, 6th ed.)