Owning a home remains the American dream. Most people work long and hard before they are finally able to purchase a home of their own. Having that dream threatened by receiving a notice of foreclosure is something no one wants to live through. Unfortunately, the recent recession in the United States has led to a record number of foreclosures. If you are among the millions of people facing foreclosure, or you are concerned that foreclosure may be in your future, there is hope. If you are in Texas, filing for Texas bankruptcy protection through the U.S. Bankruptcy Courts may be the answer that keeps your dream alive.
Most homeowners cannot afford to pay cash for a home. Therefore, they turn to a lender for a mortgage loan to cover the purchase of a home. The lender then has a lien on the property, meaning that the home itself is considered security for the loan. If a borrower gets behind on the mortgage loan payments, the lender has the legal right to initiate foreclosure proceedings on the property. Ultimately, if the borrower does nothing the lender will conduct a public auction of the property and sell it to pay off the debt. In Texas, the foreclosure is very, very quick…. you can loose your home in two or three months. However, filing a bankruptcy case will automatically stop the foreclosure sale and let you try to keep your home.
As soon as the bankruptcy case is filed, the foreclosure process must stop. The filing of bankruptcy case operates automatically as an injunction on foreclosures and other collection attempts the automatic stay stops all creditors, including your lender, from attempting to collect on a debt. The automatic stay applies to foreclosure proceedings, meaning that by filing for bankruptcy the foreclosure proceedings must stop. Although a lender can file a motion with the bankruptcy court asking the court to allow the foreclosure to resume, your attorney can oppose and argue that you be allowed to retain your home.
Although bankruptcy falls within the jurisdiction of the federal court system, exemptions available to a debtor are determined by individual states. Texas has a very liberal homestead exemption. As long as your home falls within the acreage limitations, you may exempt an unlimited amount of equity in your home. Because of this, most debtors do not need to worry about losing a home through a forced sale during bankruptcy. If you are past due on your home, an experienced bankruptcy attorney can also assist you in obtaining a home loan modification in order to make your mortgage payments more affordable. In the end, you can save your home as well as take some of the financial strain off of you and your family by filing for Texas bankruptcy.