Does Filing Bankruptcy Stop Foreclosure On Your Home?

Does Filing Bankruptcy Stop Foreclosure? The Facts You Need To Know To Save Your Home

Hundreds of thousands of homeowners are facing the possibility of foreclosure.  If you are in danger of losing your home...according to the US Courts you can save your home by filing bankruptcy to stop foreclosure.

But before you consider filing bankruptcy here are some facts to consider and keep in mind.

Which Form Of Bankruptcy Should You File To Save Your Home From Foreclosure?

File Chapter 13 bankruptcy.  Filing will stop all efforts of foreclosure on your home...as well as efforts by debt collectors to get payments from you.

Once Chapter 13 Has Been Filed...Does This Mean You Will Not Have To Pay Your Mortgage Any Longer?

Filing bankruptcy to stop foreclosure does not mean your mortgage goes away.  Or any other debts covered.  It means you will be given the chance to pay your over due debts back over time.  While other debts may be reduced...your mortgage payment will remain the same.


Can You Still Lose Your Home Even Though You've Filed Chapter 13 Bankruptcy?

The answer is yes.  How?  If the sale of your home is completed by the mortgage company before you file for bankruptcy...you will most likely lose your home.  Also note...the mortgage company must follow all state laws accordingly in order for the sale to be valid.

The other scenario that will allow the foreclosure is once your bankruptcy is allowed by the court...you must make your regular monthly mortgage payments on time.  If at anytime after the filing you fail to make your mortgage payments ..your mortgage company can once again proceed with foreclosure.

What Else Should You Know Before You File?

If you have filed for bankruptcy under any chapter within 180 days and it was dismissed by the court  due to failure to appear or comply with the court in any way you are not allowed to file bankruptcy.

Due to new bankruptcy laws...you must also enroll in an approved credit counseling service within 180 days of filing for Chapter 13.  Your attorney can advise on a counseling service.  Some law firms in addition to handling your bankruptcy also offer credit counseling and are approved by the courts to do so. 

There can be emergency exceptions to the above..but you should consult with an attorney to understand the specifics.

A Final Thought

So while filing for bankruptcy can stop the foreclosure proceedings ...you will still be responsible for making your payments.  Bankruptcy simply allows you...the homeowner to "catch up" with delinquent payments. On a another note, it will also give you some peace of mind and relieve the stress of knowing you may lose your home. 

At the very least, you will have time to focus on finding solutions to your financial situation and time to work out a loan modification with your lender.  A loan modification is a permanent solution to making your mortgage payments more affordable.

The laws that govern bankruptcy can be complex.  This article covers the basics of the law.  If you are in danger of losing your home to foreclosure and are considering filing bankruptcy...do seek the advice of an attorney whose concentration is in bankruptcy law.

For answers to your foreclosure prevention questions,
call our toll free hotline at 888-766-3693 or visit Foreclosure Help for a list of companies that can help stop home foreclosure.

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