Unfortunately, many South Carolinians are experiencing either foreclosure or periods where they are falling behind on their mortgage payments. For many of these homeowners, finding solutions to their mortgage issues is paramount. Some possible solutions vary between loan modifications, refinancing, borrowing money from family members to catch up, and short-term forbearance agreements. For some people, these solutions fix the problems and they move on. For others, they cannot refinance due to their credit scores and loan modifications are either denied or stalled. In these cases, bankruptcy may be the homeowners only alternative to save their home.
How does bankruptcy help someone who is in foreclosure and in danger of losing their home? The bankruptcy code has provisions that creates an “automatic stay” from creditors seeking to foreclose on a persons home. In other words, bankruptcy court can provide protection from your creditors from continuing the foreclosure in state court.
For most debtors, Chapter 13 bankruptcy is the best chapter to protect their home from foreclosure. A Chapter 7 bankruptcy only offers a short protection time unless the person brings the mortgage payments current during the Chapter 7. Chapter 13 bankruptcy allows the debtor to propose a plan to pay back the mortgage arrears over a five year period. As long as the debtor’s plan is approved and the debtor makes all required Trustee payments, the debtor is protected from foreclosure.
If you live in South Carolina and are facing foreclosure, feel free to call attorney Daniel Stone to set up a free consult at any of our offices located in Irmo, Columbia, Greenville, or Florence. Telephonic or Skype consults are available.