If you’re facing foreclosure, you’re probably considering different options to keep your home. This is especially true if you have a family and you don’t want to uproot your children’s lives.
Is bankruptcy one way that you can stop the foreclosure proceedings?
An automatic stay stops most collection actions
First and foremost, filing for bankruptcy provides a tactic for relief through an automatic stay. This stops any financial legal proceedings against you while your bankruptcy case is in progress. This will most likely stop the foreclosure process in its tracks while you and the bankruptcy court assess your options.
This is not a permanent solution. The automatic stay is generally lifted as soon as the bankruptcy case concludes. If you are still not able to afford the mortgage and haven’t resolved the issues, it can resume. However, bankruptcy itself often makes your mortgage affordable again. You may have eliminated some of your debt so that you can pay your mortgage lender, or you may have set up a repayment plan through Chapter 13 that consolidates your debt. You can use bankruptcy to get current on your mortgage so that the lender drops the foreclosure.
Alternately, you may decide that keeping the house isn’t in your best interests. In that situation, bankruptcy allows you time to regroup and gather your finances together for a move to a new place.
Remember, they don’t want your house. They want you to pay. If you use bankruptcy so that you can pay on time every month, they won’t take your family home. This is why it is so important to know about all of the legal options you have.