Financial woes can completely take over one’s life. And just when an individual is able to gain some control over his or her debts, they are hit with the unfathomable news that their house is being foreclosed on due to delinquent mortgage payments. This is not what any homeowner in Maryland wants to hear; however, many homeowners facing this unfortunate fate will seek ways to stop the process and keep their home.
When a mortgage is defaulted on, meaning there are missed payments, a mortgage holder or third-party lien holder can gain ownership of the property through the foreclosure process. Then, once ownership is obtained, they can sell the property and use the proceeds of the sale to pay off the mortgage. In most cases, this process is done under the supervision of the court.
When an individual files for bankruptcy, this puts an automatic stay on the foreclosure proceedings. In other words, it puts a hold on the process. However, it should be noted that how the bankruptcy process impacts the home or property would depend on the type of bankruptcy filed for. If the filer is seeking to discharge all of their debts, this could allow the mortgage holder to either move forward with the foreclosure process if there is no significant equity in the property, or it could sell the property through the bankruptcy court.
If a repayment plan is used in a bankruptcy filing, this can allow the property owner to maintain ownership of their home or property. This then stops the foreclosure process.
When an individual is struggling with debt and behind on mortgage payments, it is important that they understand how best to move forward with the matter. A legal professional can help explain the debt relief options available and how these processes could impact an individual now and in the future.