If you are dealing with out-of-control debt, bankruptcy offers a way to financial freedom and a fresh start. Those facing foreclosure may get some added benefits from the process. Below, the bankruptcy attorneys at Knochel Law Offices, P.C., in Bullhead City, AZ, discuss how filing can help if you're facing these circumstances.

Gain Time

A Chapter 7 bankruptcy automatically initiates a temporary stay on all foreclosure action. As such, you can buy some crucial time to meet with a bankruptcy attorney and figure out a game plan. In most cases, you'll have a few extra months in your home, which may offer enough opportunity to come up with new living arrangements, pack, and prepare for the upcoming transition.

Keep Your Home

With a Chapter 13 bankruptcy, you may be able to hang on to your home. It offers a debt reorganization, whereas Chapter 7 aims to eliminate what you owe. As such, if the conditions are right, you might be able to work out a deal with your lender. The lender doesn't necessarily want to sell your property; they will make far less on it than they are owed. Explore this possibility with a bankruptcy attorney to see if it’s the right solution for your situation.

Anti-Deficiency Laws

Arizona is an anti-deficiency state regarding foreclosure. As such, homeowners cannot typically be billed by their lender for the price difference between the amount of the foreclosure sale and the mortgage debt. For a non-judicial foreclosure — or one that avoids the court system — of a residential property of 2.5 acres or smaller, used for either a single one-family or single two-family home, a lender cannot pursue a deficiency under Arizona law. 

No matter where you are in the bankruptcy or foreclosure process, the team at Knochel Law Offices, P.C., will advocate for your rights and best interests. Since 1987, they have been representing clients in Arizona, California, and Nevada; they are also experienced family law, criminal defense, and personal injury lawyers. Call (928) 444-1000 or reach out through the website to schedule an appointment with a bankruptcy attorney today.