As a recent post here noted, many New York residents are still facing problems meeting their monthly mortgage payments, even as the national housing markets rebounds from the depths of 2007 and 2008. Thousands of people face the prospect of a foreclosure action, and the potential result of losing their homes. However, what many people may not know is that there are ways to confront a foreclosure action head-on. And one option is filing for Chapter 13 bankruptcy.
Some of our readers may not associate the word “bankruptcy” with good results, but the reality is that bankruptcy is a tool for consumers to use to address debt issues, including mortgage debt. In a Chapter 13 bankruptcy filing, New York homeowners would be afforded the opportunity to craft a plan that would allow them to pay off their debts in a structured manner over the course of a few years. This can allow a homeowner to correct the delinquencies in their mortgage agreement.
Lenders have motivation to work out an agreement with delinquent borrowers once it becomes clear that foreclosure may be needed. Why? Well, it is probably more beneficial for the lender to have a homeowner stay in the property in question, making payments toward the debt that is owed and taking care of the property at the same time. That is probably better than kicking the owner out of the home and leaving it empty as it awaits a foreclosure auction.
Millions of New York residents face financial challenges, but at our law firm we stand ready to help our clients in the face of these challenges. Filing for bankruptcy can be a useful option to stop a foreclosure action. For more information about how our law firm might be able to help, please visit the foreclosure defense section of our website.