Facing the possibility of foreclosure can be overwhelming. For Mississippi homeowners, bankruptcy may provide a way to pause or even prevent foreclosure, depending on the circumstances. At J Madison Brooks III Attorney at Law, we can provide legal assistance to the Greenville public in navigating these options.

How Bankruptcy Affects Foreclosure

When you file for bankruptcy, an automatic stay goes into effect. This is a court order that temporarily stops creditors, including mortgage lenders, from taking collection actions such as foreclosure. This gives homeowners immediate relief and time to consider next steps.

Chapter 7 Bankruptcy and Foreclosure

In a Chapter 7 case, debts may be discharged, but the mortgage lender still holds a lien on the property. If you cannot keep up with payments, the lender may eventually proceed with foreclosure once the bankruptcy process ends. However, Chapter 7 can delay the foreclosure process and may give you time to explore alternatives, such as loan modification or selling the home.

Chapter 13 Bankruptcy and Foreclosure

Chapter 13 is often more effective for saving a home from foreclosure. This type of bankruptcy allows you to create a repayment plan, usually lasting three to five years, to catch up on overdue mortgage payments while keeping up with current ones. As long as you follow the plan, foreclosure proceedings are generally halted.

Is Bankruptcy Right for You?

Bankruptcy can be a powerful tool, but it isn’t the right solution for everyone. The type of bankruptcy, your income, and your long-term financial goals all play a role. Consulting with an attorney helps you understand how bankruptcy laws in Mississippi apply to your situation and whether it’s the best path forward.

At J Madison Brooks III Attorney at Law, we can provide legal assistance to the Greenville public in evaluating foreclosure alternatives and guiding you through bankruptcy if it’s the right step.