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Property owners may choose bankruptcy to stop foreclosures

When New Jersey residents experience events that jeopardize their financial stability, it may not be wise to procrastinate. When consumers stand to lose their homes, it may be appropriate to consult with an attorney. The laws related to foreclosures may differ from state to state, and gaining the relative information may be beneficial.

Property owners have certain rights when it comes to foreclosure, including the right to reinstate the mortgage by making a payment that is large enough to make the mortgage current during the months that the mortgage lender takes to effect the foreclosure. If the property owner can obtain the funds to pay the outstanding amount of the mortgage in full during that time, the mortgage can be redeemed. Some states even allow a property owner to redeem the mortgage within a limited period after foreclosure.

If the property owner cannot exercise any of the above rights, the foreclosure sale will continue, and the proceeds will be used to pay off the mortgage -- any surplus will be paid to the property owner. He or she will then be evicted from the property, although the mortgage lender has no right to any of the property owner's personal belongings. However, foreclosure can be prevented by filing for bankruptcy.

Many property owners in New Jersey have opted to use the protection of personal bankruptcy to stop foreclosures. As soon as a consumer files for bankruptcy, all debt collection actions will cease, including any foreclosure actions. To learn about the protections offered under the U.S. Bankruptcy Code and the requirements for filing along with the legal proceedings that will follow, a consultation with an experienced bankruptcy attorney can provide the answers that may prevent foreclosure and re-establish financial stability.

Source: homeguides.sfgate.com, "Owner's Rights Upon Foreclosure of Property", Phil M. Fowler, Accessed on May 6, 2016

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