How to Stop Judicial Foreclosure in Texas
- 1). Determine which Texas bankruptcy court is the appropriate venue to file a bankruptcy case. There are four individual bankruptcy courts in the Lone Star State: Northern, Southern, Eastern and Western courts. You select the court nearest to your residence.
- 2). Decide whether a Chapter 7 bankruptcy or a Chapter 13 bankruptcy makes the most sense for you. A Chapter 7 bankruptcy allows you to discharge your debts. A Chapter 13 bankruptcy permits you to develop a payment plan to satisfy most of your obligations over a two- to five-year period.
- 3). Obtain a petition for bankruptcy from the bankruptcy court clerk. The petition form is available both online and from the bankruptcy court clerk's brick and mortar office.
- 4). Complete the bankruptcy petition form and supporting documentation. The petition and related forms come complete with detailed instructions. Do not leave anything blank on any form. Texas bankruptcy court rules require answering all questions. If something on a form does not apply, mark "None" or "N/A."
- 5). Include the mortgage lender suing you in foreclosure in your petition and on the matrix of creditors. The matrix of creditors is the master list of all creditors, including addresses and the amount of money due.
- 6). Claim your residence in foreclosure as your homestead on your bankruptcy petition. The homestead protection provides you an added level of protection against other creditors attempting to make a claim for any equity available in this real estate.
- 7). File the petition with the bankruptcy court clerk. Upon filing the bankruptcy petition, the bankruptcy court issues what is known as an automatic stay order. The automatic stay order stops the foreclosure case until further order of the bankruptcy court.
- 8). Include your mortgage loan in the Chapter 13 bankruptcy plan if you elect this course. If you select a Chapter 7 case, execute a reaffirmation agreement with the home mortgage lender. A reaffirmation agreement is a contract with the mortgage lender through which you agree to satisfy the terms of the loan in the future. Provided you satisfy your payments in the future, you maintain possession of the property.