Can Bankruptcy Prevent Foreclosure in New Jersey?

Facing foreclosure is an overwhelming experience for many homeowners in New Jersey. If you have fallen behind on your mortgage payments, you may feel like there are no options left to save your home. However, bankruptcy can be a powerful tool to help stop or delay foreclosure proceedings and give you a fresh start. At Carroll Law Firm, P.C., we provide legal assistance to the New Jersey public, helping individuals explore bankruptcy options that may protect their homes.

How Bankruptcy Can Help Stop Foreclosure

Filing for bankruptcy triggers an automatic stay, a legal injunction that immediately halts most collection actions against you, including foreclosure. This means that once you file, your mortgage lender must temporarily stop foreclosure efforts. This breathing room can be crucial, providing you with time to reassess your financial situation and consider your next steps.

Chapter 7 vs. Chapter 13 Bankruptcy

In New Jersey, homeowners typically consider either Chapter 7 or Chapter 13 bankruptcy:

• Chapter 7 Bankruptcy: While Chapter 7 can temporarily delay foreclosure, it does not provide a long-term solution if you are behind on your mortgage. It can, however, discharge unsecured debts like credit cards or medical bills, possibly freeing up resources to catch up on mortgage payments.

• Chapter 13 Bankruptcy: Chapter 13 offers a more sustainable option for homeowners who want to keep their property. Under a Chapter 13 plan, you can catch up on missed mortgage payments over a period of three to five years while continuing to make current payments. This approach can prevent foreclosure altogether, provided you stay on track with your repayment plan.

Additional Benefits of Bankruptcy

Besides halting foreclosure, bankruptcy can:

• Eliminate or reduce other debts, making your mortgage more manageable.
• Prevent wage garnishment and harassing creditor calls.
• Offer emotional relief by providing a clear plan to address overwhelming debt.

Contact Carroll Law Firm, P.C. for Help

If you are at risk of losing your home to foreclosure, you do not have to face this challenge alone. At Carroll Law Firm, P.C., we assist the New Jersey public by developing strategies tailored to your financial needs. Whether through Chapter 7 or Chapter 13 bankruptcy, we can help you understand your options and protect your rights.