If you are behind on your mortgage and facing foreclosure in Oklahoma, waiting can make the problem much more difficult.
Bankruptcy may provide powerful protection for homeowners, particularly when the bankruptcy case is filed before a foreclosure sale occurs.
For some homeowners, Chapter 13 bankruptcy can do more than temporarily stop foreclosure—it may provide a way to catch up past-due mortgage payments over time.
How Does Bankruptcy Stop Foreclosure?
Filing a bankruptcy case generally creates an automatic stay.
The automatic stay prohibits many creditors from continuing collection actions after bankruptcy is filed.
Foreclosure activity is generally subject to the stay, although exceptions and limitations can apply.
Timing is critical.
If you have received foreclosure papers or a foreclosure sale has been scheduled, talk to a bankruptcy attorney as soon as possible.
Can Chapter 7 Save My House?
Chapter 7 and Chapter 13 work differently.
Chapter 7 may temporarily stop foreclosure through the automatic stay, but Chapter 7 generally does not provide a multi-year repayment plan for curing delinquent mortgage payments.
If you are current on your mortgage and can continue making the payments, Chapter 7 may still be useful for eliminating other qualifying debts and freeing income to make your mortgage payment.
But if you are substantially behind and need time to catch up, Chapter 13 may be the more important option to evaluate.
How Can Chapter 13 Help With Foreclosure?
Chapter 13 allows eligible debtors to propose a repayment plan generally lasting three to five years.
For a homeowner facing foreclosure, one of Chapter 13’s most important features can be the ability to address mortgage arrears over time while maintaining required ongoing payments.
Instead of having to come up with the entire delinquent amount immediately, Chapter 13 may provide a structured way to cure the default.
Whether that solution is affordable depends on your income, expenses, mortgage and other debts.
What About My Equity?
Oklahoma law provides significant homestead protection for qualifying property.
But having an exemption and being able to afford the mortgage are two different questions.
A bankruptcy attorney evaluating your home should consider:
- Current market value
- Mortgage balance
- Other liens
- How long you have owned the property
- Whether it qualifies as your homestead
- Current mortgage payment
- Amount of arrears
- Your ability to make future payments
Do not assume that filing bankruptcy automatically means losing your house.
Likewise, do not assume that an Oklahoma homestead exemption alone guarantees that you can keep it.
What If the Foreclosure Sale Is Very Soon?
Contact a bankruptcy attorney immediately.
Preparing a bankruptcy case correctly requires financial information and documents. Waiting until the last possible moment creates unnecessary risk.
The earlier an attorney reviews the case, the more time there is to determine whether bankruptcy is appropriate and which chapter provides the best solution.
Frequently Asked Questions
Does filing bankruptcy automatically stop foreclosure?
The automatic stay generally stops many foreclosure actions when bankruptcy is filed, but exceptions and limitations exist.
Can Chapter 13 catch up my mortgage?
Chapter 13 can provide qualifying homeowners an opportunity to cure mortgage arrears through a repayment plan while maintaining required ongoing obligations.
Will I lose my house if I file Chapter 7?
Not necessarily. Oklahoma exemptions can protect qualifying home equity, but liens and mortgage-payment obligations remain important.
How late is too late to file bankruptcy before foreclosure?
Do not rely on a last-minute filing strategy. Once a foreclosure sale occurs, your options can change dramatically. Have an attorney evaluate the situation before the sale.
Free Tulsa Bankruptcy Consultation
If your Oklahoma home is in foreclosure, finding out what bankruptcy can and cannot accomplish should happen before the foreclosure sale.
Brown Law Firm helps homeowners in Tulsa and throughout Oklahoma evaluate Chapter 7 and Chapter 13 bankruptcy options.
Contact Brown Law Firm for a free bankruptcy consultation. We can review your mortgage, arrears, foreclosure status, income and other debts and explain whether bankruptcy may provide a way to protect your home.
