Can Bankruptcy Prevent Foreclosure in New Jersey?

Facing foreclosure is one of the most stressful experiences a homeowner can endure. If you are behind on mortgage payments in New Jersey, you may wonder whether filing for bankruptcy can help save your home. The answer depends on the type of bankruptcy you file and your financial situation. At The Law Offices of Andy Winchell, P.C., we guide New Jersey residents through bankruptcy options to stop or delay foreclosure.

The Automatic Stay

When you file for bankruptcy, an automatic stay immediately goes into effect. This court order temporarily halts most collection actions, including foreclosure proceedings. While the stay does not erase your mortgage debt, it can provide much-needed time to evaluate your options.

Chapter 7 Bankruptcy and Foreclosure

Chapter 7 bankruptcy may delay foreclosure but does not provide a long-term solution if you are behind on payments. If you cannot catch up on arrears, your lender may still move forward with foreclosure once the stay is lifted. However, Chapter 7 can eliminate unsecured debts such as credit cards, freeing up income that may help you keep up with mortgage payments.

Chapter 13 Bankruptcy and Foreclosure

Chapter 13 bankruptcy offers more protection for homeowners. Through a repayment plan lasting three to five years, you can catch up on missed mortgage payments while continuing to make current ones. As long as you stay on track with the plan, your lender cannot foreclose.

Which Option Is Right for You?

• Behind on payments with steady income? Chapter 13 may allow you to save your home.
• Overwhelmed by debt but unable to afford payments? Chapter 7 may give temporary relief, but foreclosure may still occur.
• Facing immediate foreclosure? Either Chapter 7 or Chapter 13 can provide immediate protection through the automatic stay.

Moving Forward

Bankruptcy is not a cure-all, but it can be a powerful tool for New Jersey homeowners at risk of losing their homes. Understanding your options early can make a difference in whether you keep your property.

At The Law Offices of Andy Winchell, P.C., we can provide legal assistance to the New Jersey public in using bankruptcy to address foreclosure and financial challenges.