People in Tennessee often hold off filing for bankruptcy on the basis of a mistaken idea that doing so causes you to lose everything you own. We at Jimmy McElroy & Associates assure you that not only is this not true, but filing for bankruptcy can actually allow you to keep your home by pausing the foreclosure process.
Even if the timer is ticking down to the moment of foreclosure, filing for bankruptcy can stop the clock, and if the foreclosure has already happened, it may not be too late to reverse it by filing for bankruptcy.
What happens when you file for bankruptcy? The answer varies slightly depending on if you have filed for bankruptcy in the past or if this is your first time filing. Initially, filing for bankruptcy will put an automatic stay on all collection activity, not only putting a stop to harassing phone calls from creditors but also suspending any foreclosure proceedings. The automatic hold may be temporary if this is not your first time filing for bankruptcy, but if it is your first time, the automatic hold will stay in place until your bankruptcy reaches its conclusion.
According to FindLaw, filing for bankruptcy can delay foreclosure but not prevent it. Once the bankruptcy period is over and the court lifts the stay, foreclosure proceeding can recompense. However, the time that you buy yourself by filing for bankruptcy can allow you to save money in order to pay off your outstanding balance on your mortgage.
The purpose of the Bankruptcy Code is to help debtors find relief and make a fresh start. More information about what bankruptcy can do is available on our website.