When facing foreclosure, your focus may be nothing more than keeping your home. Maybe you have a family. Maybe you don’t think you’ll be able to afford another home. Regardless, you want to figure out how to stop the foreclosure from happening.
Someone may mention to you that you can use bankruptcy to do so. They’ll say that once you declare bankruptcy, the lender can no longer move forward with the foreclosure. But is it really that simple?
It creates an automatic stay
In some senses, it is that simple. Filing for bankruptcy puts an automatic stay on other financial cases. They are not allowed to proceed until you have finished up the bankruptcy case, whether that means liquidating assets with Chapter 7 or re-organizing your debt with Chapter 13. Either way, you have to go through bankruptcy before the automatic stay will be lifted.
However, the automatic state is temporary. It doesn’t end the foreclosure entirely. It just means that it can’t proceed until the bankruptcy has concluded. So this is not necessarily a simple way to stop foreclosure. If you get through bankruptcy and you still cannot afford to get current on your mortgage, then the foreclosure may resume.
As such, while working through the bankruptcy case, it is very important to focus on eliminating enough debt that you will be able to make those mortgage payments again. If that’s your focus, you may be able to set yourself up for a far more positive financial future.
This whole process can be complicated, and you know just how much you have at stake. Be sure you also know about all of the legal options that you have at this time.