Facing the threat of foreclosure and losing your family’s home can be terrifying, especially if this is just one of the actions creditors are threatening because you are unable to pay your debts. Despite the serious and stressful nature of foreclosures:
- You do have options.
- You can stop the foreclosure from moving forward.
- You could even be able to save your home.
How to Stop Foreclosure: Filing for Bankruptcy
One of the most effective ways to stop creditors from initiating or proceeding with foreclosures is for borrowers to file for Chapter 7 bankruptcy. Upon filing for bankruptcy, an injunction (i.e., a court order) known as an automatic stay goes into effect, and this injunction:
- Halts foreclosure proceedings
- Forces creditors to stop contacting borrowers about debt payment
- Prevents creditors from garnishing borrowers’ wages
- Prevents creditors from repossessing borrowers’ cars or other assets.
Once a bankruptcy case has been filed and the automatic stay has stopped the foreclosure process, borrowers may be able to:
- Muster finances to get their mortgage reinstated
- Apply the Colorado homestead bankruptcy exemption to their home and effectively save it from liquidation
- Be entitled to a portion of the proceeds if their home ultimately has to be sold in order to pay creditors and resolve their bankruptcy case.
Exceptions to the Bankruptcy Automatic Stay
While Chapter 7 bankruptcy can provide distressed borrowers with relief from foreclosure, wage garnishments and other legal actions, it’s crucial that they are aware that:
- Automatic stays can be lifted and foreclosure proceedings can continue against them if their bankruptcy case is rejected by the courts. This could occur if there is a problem with their filing documents, they have failed to disclose all of their assets, they have recently filed for bankruptcy, etc.
- Creditors may try to challenge the automatic stay in order to get it lifted. If they are successful, they can proceed with foreclosure proceedings.
- Debts associated with student loans, court-ordered payments (e.g., child support, spousal support, etc.) and some tax debt cannot be discharged by Chapter 7 bankruptcy. Therefore, creditors seeking payment of these debts may still be allowed to take legal action in an effort to obtain monies owed to them.
The Trusted Denver Bankruptcy Lawyer at Lindquist-Kleissler & Company, LLC
If you have been threatened with foreclosure, are buried in debt or are facing any serious financial crisis, Denver Bankruptcy Lawyer Arthur Lindquist-Kleissler can help you figure out your best options for resolving your financial issues.
For more than 34 years, Mr. Lindquist-Kleissler and the other legal professionals at Lindquist-Kleissler & Company, LLC have been providing both individuals and businesses with the highest quality of legal services when it comes to debt relief and bankruptcy (including civil litigation matters associated with bankruptcy). From simple to complex bankruptcy cases, Mr. Lindquist-Kleissler can always be trusted to help each of his clients resolve their financial issues as discretely, efficiently and favorably as possible.
Contact Us for a Free Consult
For a free 30-minute consult to learn more about your rights and options, contact us by calling (303) 691-9774, or email us using the form on this page. You will pay nothing up front to obtain trusted, professional advice regarding your case and your options.
From our office in Denver, Arthur Lindquist-Kleissler represents clients throughout the Denver Metropolitan area and Colorado, including (but not limited to) Aurora and Arapahoe County.