Can filing bankruptcy in Nebraska help stop foreclosure?

Options for bankruptcy Nebraska residents may present the possibility for certain homeowners to prevent, or at the very least, forestall a foreclosure proceeding, under a limited number of circumstances. For starters, any bankruptcy filing in any state, including the state of Nebraska, creates automatic stay protections for debtors, effectively preventing creditor collection attempts until the bankruptcy filing is resolved. This automatic stay protection will include protection from foreclosure proceedings, at least temporarily.

From a longer-term perspective, eligible debtors will most likely either file under Chapter 7 or Chapter 13 when considering bankruptcy as a foreclosure prevention, and overall debt reduction, option. The following lists the benefits of bankruptcy, by chapter, on foreclosure proceedings:

• Chapter 13: In Chapter 13, a debtor creates a reorganization and repayment plan, over the course of three to five years, to repay outstanding debt obligations under the supervision of the courts and a bankruptcy trustee. During this time, if a debtor adheres to the court mandated Chapter 13 plan, lenders cannot foreclosure on a given homestead. If practical from a financial perspective, a debtor may be able to prevent foreclosure entirely through Chapter 13.

• Chapter 7: In a limited number of circumstances, a debtor may be protected by state exemptions concerning homesteads in Chapter 7 filings. The availability of this option depends on the state exemption list, the value of the home in question, the value of the state exemption, the value of the outstanding home loan, and the number of the home loans outstanding, second and other junior liens.

For more information, specifically information about your foreclosure and debt crisis, consult with a Nebraska foreclosure lawyer today.