Bankruptcy as a Solution to Foreclosure in New Jersey
Filing for bankruptcy can provide temporary relief from foreclosure on your home in New Jersey. An automatic stay issued by the court upon filing requires all creditors, including your mortgage lender, to halt collection actions immediately. This includes postponing any scheduled foreclosure sales while the bankruptcy case is pending, typically offering a reprieve of three to four months. However, the lender may petition the court to lift the stay, potentially diminishing this benefit. Additionally, filing for bankruptcy does not necessarily stop the notice period for a scheduled foreclosure sale.
A Chapter 13 bankruptcy, known as reorganization bankruptcy, is especially effective in stopping foreclosure and sheriff’s sales, preventing repossession, and halting utility shutoffs. It necessitates a regular income from the debtor to manage monthly living expenses alongside a court-arranged repayment plan for consolidated debts over 3 to 5 years. This type of bankruptcy provides an opportunity to catch up on secured debts like a mortgage, potentially allowing you to avoid foreclosure entirely.
Implications and Benefits of Chapter 13 Bankruptcy:
- Stop Foreclosure and Sheriff Sales: Filing for Chapter 13 bankruptcy halts foreclosure or sheriff’s sales as long as the bankruptcy remains active.
- Creditor Harassment: Creditors are required to stop all forms of contact after filing, offering you a chance to reorganize your finances peacefully.
- Asset Protection: The filing can safeguard assets like your car from repossession and prevent utility shutoffs, forming a comprehensive defense against creditors.
- Debt Relief: Some types of debts, including credit card debt, payday loans, and medical bills, can be reorganized or eliminated, lightening your financial load.
Seeking Legal Guidance: Consulting with an experienced bankruptcy attorney is vital. They can offer customized advice and help you comprehend the full spectrum of your options and their implications for your unique situation.
For New Jersey homeowners facing foreclosure, bankruptcy can be a strategic stopgap and a structured route to financial stability. Working with an informed attorney can streamline navigating this intricate process and aid in protecting your home.
Seasoned Bankruptcy Assistance from Friscia & Associates
Confronting foreclosure in New Jersey and considering bankruptcy? Friscia & Associates is here to help. Our team of skilled attorneys will assist you in understanding your options and developing an effective strategy to safeguard your home. For personalized advice and legal support, contact us. Call (973) 500-8024 or (212) 960-8308, or submit your contact information online for a consultation.
