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Vermont Bankruptcy Services

Law Office James Palmisano
417 Barre Street
Montpelier, Vermont 05602
Phone: (800) 585-3169
Phone: (802) 229-4001
Fax: (802) 229-2733

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.:STOP:  Foreclosures - Repossessions - Tax Sales:.

Stop Foreclosure
The greatest fear of many families in serious financial trouble is that they will lose their homes. Bankruptcy offers a last chance for families to save their houses by halting a foreclosure (or tax sale) and by repaying any default amount over a period of years.

There are several important things to remember about how bankruptcy can help save your home from foreclosure:

  • If you file a bankruptcy case, you can stop a foreclosure, although Chapter 7 will only stop it for a short period of time.
  • Chapter 7 does not allow you to modify a mortgage unless the lender is willing to do so outside of bankruptcy court.
  • Chapter 7 may buy you some time if that is important to you.
  • Chapter 13 will permanently stop the foreclosure. It allows you to pay off your overdue payments over time under a court-approved bankruptcy plan.
  • Chapter 13 gives you an opportunity to challenge the amount due or mortgage servicing abuse through the bankruptcy claim process.
  • Chapter 13 gives you a chance to assert predatory lending claims against your mortgage company, the original mortgage company and even the broker. .

Your bankruptcy case must be filed before the foreclosure action (or tax sale) has been completed. In the case of a foreclosure by sale it must be filed before the actual sale is held. In the case of a strict foreclosure it must be filed before the redemption date expires. (Similar to strict foreclosure, in the case of a tax sale the bankruptcy must be filed before the redemption date expires). In Chapter 13 you would repay the amount you fell behind on the mortgage over a period of three to five years.  You will also begin to again pay your regular mortgage payments.  If you pay all the payments under your Chapter 13 case the foreclosure will never start up again.  However, failure to make payments will allow the mortgage creditor to restart the foreclosure action at the same point where it left off before you filed your Chapter 13 case.

Stop Auto Repossessions
Chapter 13 is also used to save property subject to repossession.  After filing, you will three to five years to make up your missed payments.  You should file Chapter 13 before your vehicle is repossessed. 

If your lender repossesses your vehicle, it will probably sell it for a very low price.  If your lender sells your car for less than it's worth, it will still try to make you pay the loan balance.

Three Ways to Avoid Repossession

  1. Get your payments up to date. Most people can't do this right away.
  2. Keep your vehicle in a locked garage. Your lender can't "breach the peace" to repossess a vehicle. What does "breach the peace" mean? Your lender can't break into a locked garage to repossess the vehicle.
  3. Keep your vehicle in an unusual place where your lender can't find it.

.:See our comprehensive page on "Reduce Automobile Loans" :.


Stop Wage Garnishment
Creditors can garnish up to 25% of your wages to pay outstanding debt.  Chapter 7 bankruptcy immediately stops wages garnishments, with the exception of some tax debts and some student loans.  Chapter 13 bankruptcy immediately stops ALL wage garnishments.

 

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Pre-Bankruptcy Counseling
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