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Stopping the foreclosure nightmare

Are you behind on your mortgage payments? Is your lender threatening foreclosure? If you are, you are the only one. Sadly, this is a situation that numerous New Jersey residents have found themselves facing.

When you cannot pay your mortgage and the bank is threatening to take your home away, you may feel that there is nothing you can do to stop it if you are lacking funds. The truth is, however, there may be a way, and that is through filing for bankruptcy.

Bankruptcy? Won't that hurt more than it helps?

While it is true, there are some negatives to filing for bankruptcy -- such as its effect on your credit rating -- it also has quite a few positives. You simply have to decide if, for you, the positives outweigh the negatives. Losing your home to foreclosure can also hurt your credit score, and without bankruptcy protections, you will not receive any help with your other debts.

How can a bankruptcy help?

By filing for bankruptcy, either a Chapter 7 or a Chapter 13, an automatic stay is issued that will stop the foreclosure process. This means that your mortgage lender cannot continue foreclosure proceedings until the court makes a decision in your bankruptcy case. This can take several months.

If I want to keep my home, which type of bankruptcy is for me?

If you file a Chapter 7 bankruptcy, you may not get to keep your home. This is a liquidation bankruptcy, meaning the court will sell certain assets in order to pay back lenders. If, however, you file a Chapter 13 bankruptcy and it receives approval, the court will create a repayment schedule that fits within your current budget. If you can keep up with the repayment plan and your mortgage payments, you will get to keep your home.

Do not wait; get help as soon as possible

Foreclosure is not something that happens overnight. Lenders wait until one is months behind on his or her payments before threatening to foreclose. After a certain point, even a bankruptcy cannot help stop the process. So, before things get too out of hand, and before your lender starts threatening to take away your home, you can take actions to address your financial situation. Bankruptcy, if approved, can offer you the relief you desire.

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