Will Bankruptcy Stop Foreclosure?

Bankruptcy can stop foreclosure. When the economy sags and unemployment rates rise, people respond by doing whatever they can to save their homes. Using bankruptcy to stop foreclosure is a viable option to save your home. You just have to make sure that you file in a timely manner, and pay attention to dates on the notices.

Should I File Chapter 7 or 13?

There are two types of bankruptcy. Both will stop a foreclosure. However, the two types differ from each other in other ways.

Chapter 7 - This type of bankruptcy is a complete liquidation of debt except that you may reaffirm certain debts such as your home mortgage, car loans, etc.

Chapter 13 - This type of bankruptcy is more like a debt consolidation plan than a true bankruptcy. Under Chapter 13, all past due debts are consolidated into one payment and paid monthly through the court trustee. It is important to note that this payment will be in addition to the regular monthly payment for your other bills.

Consult a Professional

As with any other financial undertaking of this magnitude, you should contact a bankruptcy attorney so that you have a good idea of what to expect.