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Does Bankruptcy Definitively Stop Foreclosure?

Many clients come to a foreclosure attorney dallas and request information about bankruptcy and you often hear in their voice a sort of a question. Their question comes in the form of a statement, yet it is a question nonetheless. The question goes something like this. And the bankruptcy stops foreclosure as a surefire bet, right? They throw that question on the end because they seek the reassurance from the attorney or staff involved in the field of bankruptcy law.

We are careful to assure our clients that when a competent dallas bankruptcy attorney files a case to protect a home from foreclosure, the bankruptcy doesn’t wave a wand a fix all your problems. It is important to realize that when you file bankruptcy to save your home, you will need to be prepared to resume your regularly monthly mortgage payment the month following the month in which your case is filed.

Strategic Timing of a Chapter 13 Bankruptcy Filing

When clients come into our office to save their home from foreclosure, we often seek to find the best date to file the bankruptcy. For example, if a client comes to our office and they are in default, but have not been given a date for foreclosure, we will hang off filing the bankruptcy for some time in order to let the client build up cash reserves in their bank account. By doing this, we will cause their potential chapter 13 monthly payment to go up each month that passes, but the amount by which the trustee payment increases due to an additional month passing before filing the case is usually not a significant amount. Take a $1,200 mortgage payment and you let one more month pass before filing. In that situation, the trustee payment would increase by only about $20 by waiting one more month. However, by doing that, you would hypothetically be able to have $1,200 more in your bank account for an emergency reserve to help insure your ability to successfully handle your Ch. 13 payments.