Can Bankruptcy Help me Avoid Foreclosure in Atlanta, Georgia?

If you are a homeowner facing foreclosure in Atlanta, Georgia, and you want to keep your home, filing Chapter 7 bankruptcy or Chapter 13 bankruptcy will give you several options.

How Can Chapter 7 Bankruptcy Help?

  • Filing Chapter 7 Bankruptcy: Filing Chapter 7 bankruptcy temporarily stops foreclosures in Atlanta, Georgia by creating what is called the automatic bankruptcy stay. The bankruptcy stay is a court order that prevents a mortgage company from foreclosing on a home, even it is the day before foreclosure day (which, in Georgia, is the first Tuesday of every month). Although filing Chapter 7 bankruptcy will require a debtor to ultimately give up their house, it can probably be lived in for a few months after the originally scheduled foreclosure date.

How Can Chapter 13 Bankruptcy Help?

  • Filing Chapter 13 Bankruptcy: Filing Chapter 13 bankruptcy also uses the automatic bankruptcy stay to stop foreclosures in Atlanta, Georgia. In a Chapter 13 bankruptcy, a debtor reorganizes his or her debts to create a 3 to 5 year repayment plan to creditors. The plan often includes mortgage arrearage that a debtor has accumulated and proposes to pay with no interest or additional late fees. As long as the debtor also makes timely monthly payments on his or her mortgage after filing Chapter 13, the debtor can keep his or her home.
  • Eliminate Your Second Mortgage: Filing Chapter 13 bankruptcy can make use of a process known as “lien stripping” to allow Atlanta, Georgia homeowners to avoid paying their second mortgage. Lien stripping changes the status of a second mortgage company from a secured creditor to an unsecured creditor and forces the second mortgage company to cancel the security lien on the property. While the Chapter 13 case is pending, the debtor does not have to make the monthly second mortgage payment. At the end of the Chapter 13, the court issues an order completely canceling the second mortgage lien!

Are There Other Helpful Options Available?

Home Loan Modification: There are a few federal home loan modification programs that mortgage companies are currently offering to borrowers, including the Home Affordable Modification Program or HAMP. HAMP has a few requirements for eligibility, but it is not necessary that a borrower be behind on his monthly mortgage payments. Also, even after filing bankruptcy, a debtor may still proceed with the home loan modification process.

If you are a homeowner facing foreclosure in Atlanta, Georgia, and wish to discuss the options available for keeping your home, contact the Law Offices of Charles Clapp at 404.585.0040 to schedule a free initial consultation.


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