Facing foreclosure can put the future in uncertain terms. It can be very stressful to find out that you are going to lose your home, and you may be interested in what options you have to stop the foreclosure case.
One option that people often consider is filing for bankruptcy. For instance, maybe you have so much debt that you have been missing mortgage payments, which is why the lender is going to foreclose in the first place. If you file for bankruptcy, can that prevent the foreclosure?
An automatic stay
In the short term, yes, filing for bankruptcy does pause the foreclosure process. This is due to the fact that the court will issue an automatic stay, which applies to other financial cases pending against you. The foreclosure cannot continue, nor can any other collection efforts, until the bankruptcy case is over.
In the long term, though, once your bankruptcy is concluded, you do need to realize that the automatic stay will be lifted. If you are still not current on your mortgage, the foreclosure could resume.
Even in that situation, though, bankruptcy can help. If you file for Chapter 7 bankruptcy, liquidate non-exempt assets and eliminate other debts, you may be able to afford your mortgage again. If you file for Chapter 13 bankruptcy, consolidating your debt into a repayment plan, you may restructure your debt so that you can start making your monthly mortgage payments. If so, the lender will not foreclose and you can get current on those payments moving forward.
The bankruptcy process can feel complex, especially if you have never gone through it before, so it can help to work with an experienced attorney.