Bankruptcy law provides debtors with a mechanism to eliminate, reduce, and/or extend most debt and to protect themselves against pursuit and harassment by creditors.
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Most foreclosure actions in the Greater Long Island - New York areas take approximately one (1) year from the date legal proceedings are initiated.
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A bankruptcy filing can stop foreclosure or eviction.
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The mortgage holder foreclosing on a residence is not required to give any further notices to the homeowner after the initial service of the summons and complaint, unless the homeowner answers the complaint and/or files a notice of appearance.
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Bankruptcy is often the most direct and powerful tool for a debtor to deal with serious financial problems.
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A mortgage holder is not required to give notice of the foreclosure sale auction to the homeowner in foreclosure unless the homeowner has filed and answer or appearance paper in the foreclosure action.
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The different types of bankruptcy cases, namely, Chapter 7, Chapter 13, and Chapter 11, are appropriate to different situations and can vary greatly in how they would apply to particular circumstances.
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A mortgage holder can refuse to take catch up payments and insist that a homeowner in arrears pay all of their arrears or be subject to being declared in default under the mortgage and subject to the initiation of a foreclosure action.
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Most mortgage holders do not easily enter into negotiated settlement and/or modification agreements and even if they indicate that they will review information and send a homeowner an application for a potential agreement, until there is an actual written and signed agreement the homeowner in arrears is not protected by any implicit understandings or even by verbal assurances which can easily be changed, misunderstood and denied.
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Mortgage arrears, real estate taxes and other debts can be reinstated over a five (5) year Chapter 13 bankruptcy plan.
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A Chapter 13 bankruptcy case can extend and reduce unsecured debts such as credit card debt while a Chapter 7 bankruptcy case can eliminate such debts.
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A Chapter 13 case does not require the mortgage holder's consent to allow a reinstatement of the mortgage arrears over a five (5) year plan where the homeowner on a monthly basis goes back to paying their regular mortgage payments and also pays a separate plan payment calculated to allow a cure of the mortgage arrears over a sixty (60) month plan.
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A bankruptcy case will allow a homeowner to immediately stop a foreclosure proceeding and/or a scheduled foreclosure auction sale, as long as the bankruptcy case is filed prior to the sale and the homeowner meets certain requirements under the bankruptcy code.
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