Theoretically, declaring bankruptcy is meant to delay the foreclosure procedure indefinitely. There are only a few methods to remove a property from a Chapter 13 bankruptcy, and all but one of them are typically undesirable. However, if the home is never removed from the court-ordered plan, the process is intended to bring the home current and out of foreclosure.
The purpose of bankruptcy is to give foreclosure victims time under the protection of the law and the courts to reorganize their debts and repay the delinquent amounts. If they are able to complete the entire payment plan associated with the bankruptcy, they will be current on their mortgage loan. Since a bank cannot foreclose on a property where the loan is not in default, the foreclosure process will be completed. Obviously, this is the most preferable way to prevent foreclosure by filing bankruptcy, but it is also the least common.
It is far more probable that the homeowners will be unable to maintain the bankruptcy plan payments. In this case, if they neglect a payment, the court will dismiss the case, and the lender will be able to restart the foreclosure process from the date the homeowners filed for bankruptcy. There is no need for them to start over from scratch because bankruptcy merely suspends collection efforts; it does not halt them utterly. As a result, as soon as the bankruptcy is dismissed, the bank will attempt to sell the home at a sheriff sale, add all the other late payments to the homeowners' credit report, increase the total mortgage payoff, re-engage the attorneys, and do whatever it takes to obtain as much money as possible.
The final method for removing a property from bankruptcy is for the owners to propose that the mortgage be removed from the plan. This is permissible at any time, although it is not recommended outside of specific circumstances. Additionally, if they voluntarily decide to dismiss the bankruptcy because they have found someone to refinance the loan or a buyer to purchase the property, the foreclosure process can begin again, just as it would if they had missed a plan payment. Of course, if the foreclosure victims notify the mortgage company that they are working on a solution and demonstrate to the court that this was the reason the bankruptcy was dismissed, the lender may be very willing to extend the closing date.
Nonetheless, the procedure is intended to end the foreclosure entirely if the homeowners make all payments on the reorganization plan during the bankruptcy. However, starting to neglect payments on the plan will not delay the foreclosure. Homeowners who are in a diminished or unstable financial position compared to their position prior to falling behind should carefully consider whether filing bankruptcy to halt foreclosure is a wise decision. This should involve interviewing a number of prospective attorneys who can submit the necessary paperwork and guide foreclosure victims through the process. Filing for bankruptcy is never a simple choice or a panacea, but it can buy the homeowner the time necessary to negotiate a more permanent solution to the foreclosure.
" - https://www.affordablecebu.com/