Foreclosure
Law Definitions
Bankruptcy
Bankruptcy
is a legal proceeding in which an individual who cannot
pay his or her bills can get a fresh financial start.
The right to file for bankruptcy is provided by federal
law, and all bankruptcy cases are handled in federal
court.
Filing
bankruptcy immediately stops all of a homeowner’s
creditors from seeking to collect debts from him or her
(including his or her mortgage), at least until all the
homeowner’s debts are sorted out according to the law.
It
is important to understand that bankruptcy laws and
exemptions differ from state to state. The homeowner
must also understand the different types of bankruptcies
and what the effects of filing bankruptcy has on his or
her future personal finances.
Filing
for bankruptcy is not as easy as one may think to stop
foreclosure. New bankruptcy laws went into effect
October 17, 2005. The new bankruptcy laws require,
among other things, individuals to go thru a minimum
three-month credit counseling period before filing for
bankruptcy. These new laws were put into affect in
large part to stop people from abusing the bankruptcy laws
by filing for bankruptcy a few days before his or her
foreclosure.
To
learn more about the new bankruptcy laws and how it can
affect a foreclosure, click
here.
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foreclosure law definitions
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