For many people living in Oregon, a house is more than just a place of residence; rather, it is a home filled with love, laughter and fond memories. So when faced with the prospect of losing your home to foreclosure, it can be extremely discouraging and emotionally devastating. Even when faced with financial challenges such as overwhelming debt and foreclosure, however, you may be encouraged to learn that there are ways to stop foreclosure and find a fresh financial start. Chapter 7 bankruptcy is one such option that you may want to consider.
Chapter 7 offers an automatic stay for homeowners faced with foreclosure. When you file just prior to a foreclosure sale, you can extend the process anywhere from 6 weeks to 3 months, depending on how long the process takes. During that time, the judge presiding over the bankruptcy court will decide if the property is eligible to be exempt from the proceedings. Once you file for bankruptcy, the lienholder on your home is required to file a motion with the court before it can legally continue the foreclosure process. A hearing will typically be set one month after the motion is filed. After the hearing, the judge will either grant the lender’s request to move forward with the foreclosure sale or declare the property exempt.
Only primary residences will be considered as bankruptcy exemptions in Oregon and even after filing for Chapter 7, you will still need to make payments on your mortgage. Otherwise, you could still lose it. For more information on how filing for personal bankruptcy could help your unique financial situation, you should speak with a bankruptcy attorney.
Source: Fox Business, “File Bankruptcy to Stall Foreclosure?” Justin Harelik, October 2, 2013.