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If you live in Lakewood and are behind on your mortgage payments due to overwhelming debt, you may have started to receive letters stating that your home is going into foreclosure. That can be devastating to anyone. But If you’ve received a foreclosure notice, it’s not too late! You do, however, need to act quickly.
The best way to figure out your next steps is to contact an experienced Lakewood bankruptcy attorney.
Many unscrupulous debt relief attorneys out there will tell you that bankruptcy is a magic bullet that will solve all of your debt problems. The goal of our Lakewood bankruptcy lawyers is to be as straightforward with you about bankruptcy as possible. To that end, we feel you should know that while filing for bankruptcy, in the right situation, can have many benefits, the legal process cannot miraculously resolve all of your debt issues.
One common question our experienced legal team hears all the time is whether filing for bankruptcy will help a person who is behind on their mortgage payments avoid foreclosure.
As in so many legal matters, the answer to this depends on your specific circumstances, though the following is a brief overview of how bankruptcy may be able to help. Our experienced Lakewood bankruptcy attorneys have created this page to provide you with information about Chapter 7 and 13 bankruptcy and to educate you about how bankruptcy can help avoid foreclosure.
For a more specific answer to your bankruptcy and foreclosure-related questions, we encourage you to reach out to our Lakewood bankruptcy attorneys. We offer a no-cost case evaluation to potential clients in order to answer all of your bankruptcy-related questions.
When you file for bankruptcy in Colorado, an automatic stay is issued which forces your creditors, including your mortgage lenders, to immediately stop any collection actions. If your home is going to be foreclosed upon or is in an active foreclosure case, the automatic stay will legally stall the action from taking place.
For those of you in Jefferson County seeking to file bankruptcy for other debt-related issues in addition to foreclosure, the automatic stay also halts all creditor collection attempts for the duration of your bankruptcy case. What that means is that if you’re being harassed by debt collection agencies trying to collect on past due debt, the calls, e-mails, and letters must stop as soon as your file for bankruptcy in Lakewood.
In the spirit of full disclosure, it must be said that the automatic stay does not stop foreclosure proceedings entirely, merely halts them. Your lender must either wait until after bankruptcy to restart the foreclosure process or seek to have the automatic stay lifted by the court, a process that can take months.
Chapter 7 bankruptcy, commonly referred to as “simple,” “straight,” or “liquidation” bankruptcy is the most commonly filed chapter of bankruptcy filed in Colorado. In general, if you spend most or all of your paycheck on your household expenses such as your mortgage, car payments, and groceries and there is little or nothing left over at the end of the month to pay your credit cards, hospital bills, and other debts, then you likely qualify for a Chapter 7 Bankruptcy.
During a Chapter 7 bankruptcy, a court-appointed bankruptcy trustee will liquidate all of your non-exempt assets and use the proceeds to pay off your priority debts. Any unsecured debt left over at the end of this process is then discharged/erased by the Federal Bankruptcy Court.
Colorado does offer generous asset exemptions for Chapter 7 debt relief seekers, including a homestead exemption that can protect up to $250,000 in home equity. Moreover, this number increases to $350,000 if the Lakewood bankruptcy petitioner is either elderly or disabled.
Thanks to the automatic stay, Chapter 7 bankruptcy temporarily halts foreclosure proceedings, however, its ability to ultimately save your home from foreclosure is limited. If you want to permanently stop foreclosure, you’ll need to get current on your payments by the end of your Chapter 7 bankruptcy, which is a relatively short amount of time. Most Chapter 7 bankruptcy cases only last four to six months from start to finish. Ultimately, the automatic stay gives you the time and the freedom from other debt, to get caught up on your current mortgage payments.
If you cannot keep up with your mortgage payments once your Chapter 7 bankruptcy case has been discharged, your lender may still proceed with foreclosure if you fall behind on your mortgage payments. If you wish to keep your home, you must continue making your mortgage payments during and after your Chapter 7 bankruptcy.
For debt relief seekers in Lakewood county with a stable income and who can make their monthly mortgage payments as they are now, but have arrearages or back payments due, filing for Chapter 13 bankruptcy may be the best option. This is because filing Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows you to include your past due mortgage payments in your bankruptcy plan to avoid foreclosure.
With Chapter 13 bankruptcy, all of your debts are combined into one manageable payment meant to help you pay down your outstanding debt over the course of several years. Your experienced Lakewood 13 bankruptcy attorney will sit down with you and look at your financials and come up with a reasonable monthly payment that you will make to the bankruptcy court over the course of three to five years. Generally, we’ve found that so long as your income remains the same throughout your Chapter 13 bankruptcy case, you will have plenty of time to get current on your mortgage payments, thus avoiding foreclosure at the end of your bankruptcy case.
It’s worth noting that it may not be in the best interests of Lakewood residents facing bankruptcy to keep a home they cannot afford to make payments on. Speaking about your situation with an experienced and knowledgeable Jefferson County bankruptcy attorney can allow you to examine your options and choose the most appropriate one for the good of your financial future.
The foreclosure process triggers many intricate issues, and the last thing you should do is try and sort this out on your own– there are just too many moving parts and options. Add on the fact that you’re still dealing with ever-increasing debt, and you’re quickly in way over your head.
Our Lakewood debt relief lawyers understand that the one-two punch of debt and foreclosure can send people reeling. But it doesn’t have to be a TKO if you quickly retain the help of an experienced Lakewood bankruptcy attorney.
If you’re looking for a way out of debt while trying to keep your home from repossession, help is precisely what you need. And you should seek it as quickly as possible. That is why our Jefferson County debt relief law firm offers free case consultations to all prospective clients in Lakewood seeking bankruptcy help. Contact our team of dedicated legal professionals today and let us help you find debt relief and retain your home.