does bankruptcy stop foreclosure?

Question by Noel B: does bankruptcy stop foreclosure?
Will filing bankruptcy (7 or 13) stop foreclosure? Do they take the house?

Best answer:

Answer by Rainy
no filing bankruptcy doesn’t stop foreclosure

What do you think? Answer below!

7 Comments/Reviews

  • foreclosurefish_com says:

    Either way, filing bankruptcy and including your mortgage loan in the petition will temporarily stop any foreclosure proceedings. The automatic stay will be in effect, which will prohibit any creditors from pursing collection activities for as long as the stay is in place. This means that the bank can not move ahead with its lawsuit against you, nor have the house sold at a county sheriff sale.

    But where the house goes from there depends on whether you file Chapter 7 or Chapter 13 bankruptcy. There are big differences between the two, and state exemptions and rules may determine which one you best qualify for and what property you get to keep. The best idea is probably to consult with a personal bankruptcy lawyer before moving ahead with either filing, although it is quite possible to file bankruptcy on your own.

    A Chapter 7 will allow you to discharge your unsecured debts and secured debts, as long as the creditors have access to the collateral for which the loan was guaranteed. That means that you can discharge your mortgage under this type of filing, but the bank will get to keep the house. You will also not have to worry about a deficiency judgment, as the house will be considered the best the bank can expect and any remaining balance on the mortgage will be discharged.

    With a Chapter 13, you will enter into a payment plan in order to get caught up on the debts that you have fallen behind. Currently, bankruptcy judges do not have the authority to lower mortgage balances, so you would have to pay back the total amount you are behind as well as keep up on your regular monthly mortgage payment. For many homeowners, this can be expensive; although, if you make it through the 3-5 year plan, you will get to keep your home. If you fall behind, the bank will most likely have the automatic stay lifted and put the house back into foreclosure.

    Hope that helps.

  • golferwhoworks says:

    chapter 13 may. but not always. Chapter 7 will for sure loose the home with out a reaffirmation agreement in place

  • wartz says:

    It would delay it. In a Chapter 13 you can propose a plan to make current payments on time and pay the delinquent amounts through the plan over 3 to 5 years.

  • S P says:

    It will depend on what you qualify for. You can contact a local bk attorney most will see you free the first time. A chapter 7 to qualify you would have to be current on the home loan to keep it. A chapter 13 is run thru the plan and it doesn’t have to be current, but not foreclosed upon yet., and the payments would be made thru the trustees of the bk court. A good bankruptcy attorney will be able to tell you whether or not you qualify for 7 or 13, they will need to see you last 6 months of pay stubs, assets, list of all your debts and last 4 years of taxes. Good Luck!!

  • Dennis S says:

    That’s a question for a qualified attorney but I think the rules will change today if the congress passes George Bush’s Wall St giveaway!

  • LuthienTinuviel says:

    unfortunately, no. My mom had two bankruptcies when her house foreclosed.

  • Mims says:

    Yes, for the time. You must have your house payments caught up by the end of your bankruptcy. It give you more time

    Good Luck (especially during these hard times)

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