Can a Foreclosure be Stopped by Filing either a Chapter 7 or a Chapter 11?

Despite the fact that Chapter 13 bankruptcy is typically viewed as the most common way to stop a Florida foreclosure, it is not the only bankruptcy filing that you can employ in order to prevent losing your home and/or property. You can legally stop the foreclosure process using Chapter 7 liquidation or a Chapter 11 reorganization bankruptcy in order to stop the foreclosure process. In some instances, these bankruptcy filings may be more appropriate here in a mid-Florida bankruptcy or foreclosure case.

Stopping a Florida foreclosure by filing Chapter 7

If you are looking to just walk away from your property and wipe out all your other financial obligations because you have gotten so far behind on your monthly mortgage payments, then filing Chapter 7 bankruptcy may be your best option. Just like with a Chapter 13 bankruptcy filing, the Chapter 7 employs an automatic stay in order to stop the foreclosure process immediately.

Assuming that the “Statement of Intentions” involved in your specific Chapter 7 bankruptcy case has a provision for surrendering your home, your mortgage lender will have to file a “Motion for Relief from Stay” and wait for motion hearing before they can re-start the foreclosure process. It will take between 3 and 6 weeks for the motion hearing and up to 4 weeks on the foreclosure process. The benefits of filing a Chapter 7 is that it allows you to get your personal affairs back in order by eliminating any liability you may have remaining on the unpaid mortgage as well as finding another place for you and your family to live.

Stopping a Florida foreclosure by filing Chapter 11

Although a Chapter 11 is most commonly recognized as a reorganization and repayment plan for a business, individuals can also use it to reorganize and repay their debts as well. In fact, should your indebtedness exceed the allowable limits of a Chapter 13 bankruptcy, your only option is to file a Chapter 11. The allowable debt ceilings under a Chapter 13 are $1,010,650 in secured debts and $336,900 in unsecured debt.

Just as a Chapter 13 filing operates, you must submit a reorganization and repayment plan whenever you file a Chapter 11. Additionally, it must be approved and confirmed by the judge trying your bankruptcy case. For more information, feel free to contact Clark & Washington to assist you with either filing or to answer any questions you may have regarding your situation.