Will Bankruptcy Stop Foreclosure?

Will bankruptcy stop foreclosure? The short answer is no.

The only way to stop or avoid foreclosure is to pay a mortgage lender. And bankruptcy does not allow a debtor to keep a house without paying a mortgage lender.

Bankruptcy does allow a debtor time to pay a mortgage lender. When a person files bankruptcy, by law, all civil actions must stop. However, a mortgage lender can request relief from the automatic stay of legal actions. When the relief is granted, the mortgage lender simply proceeds with the foreclosure action. While the foreclosure action is stopped, the debtor has time to raise the money needed to pay the mortgage lender.

While bankruptcy does not stop foreclosure, it may make it easier for a debtor to pay a mortgage lender. Bankruptcy can discharge certain unsecured debts meaning that those debts do not need to be paid. With fewer debts to pay, a debtor may have more money with which to pay mortgage payments.

A chapter 13 bankruptcy is a Court ordered payment plan. It allows that the catch up amount needed to bring a mortgage current can be paid over a period of time. If the amount needed to catch up or bring current a mortgage is $5,000, a debtor will not need to pay the $5,000 immediately, but will be allowed to pay it over time. Thus making it easier to keep his mortgage.

Bankruptcy is very detailed and not everyone qualifies. If you think that it may help you deal with foreclosure, contact a licensed lawyer.

This article is general information. If you have any questions of any nature about foreclosure or bankruptcy, talk with a lawyer licensed in your state.

Stop! Don't blindly chase any option to stop foreclosure. See stop foreclosure options to learn what options you have in your situation. Remember, what works in one person's situation, may or may not work in your situation to stop, avoid, and prevent foreclosure. For more general information, see Stop Foreclosure - Five Options You Need To Know.

You may republish this article as long as the wording is not changed and all links remain active.