Being behind on your mortgage is a frightening prospect. If you haven't already been served notice of foreclosure, it could be coming soon.
If you want to keep your home, what can you do? Can bankruptcy stop a foreclosure proceeding?
All bankruptcies can stop foreclosure temporarily
When a person files bankruptcy, a process called an "automatic stay" goes into effect. The automatic stay puts all collection actions on hold, including foreclosure. This can buy you valuable time to come up with a plan to save your home.
However, once the automatic stay is lifted - either because the bankruptcy is finished or because your lender successfully asked the court to remove it - the foreclosure proceedings can start again.
Be sure to talk to a lawyer right away if you're having trouble paying your mortgage. If the foreclosure proceedings have advanced far enough, even an automatic stay may not be able to stop them.
Chapter 13 can sometimes stop foreclosure completely
In Chapter 13 bankruptcy, you set up a payment plan to pay back all or part of your outstanding debts. If you're in foreclosure and want to keep your home, your attorney can help you figure out a plan to pay back what you owe. Be aware, though, you will have to keep current with your ongoing mortgage payments in addition to paying back your past debt.
Chapter 7, on the other hand, doesn't give you the same options for keeping your home. Sometimes, though, this really is your best long term option.
Only an attorney can help you choose the best path
Bankruptcy is complicated, whether there is a foreclosure involved or not. It is dangerous to proceed down this path alone.
If you're having trouble keeping up with your mortgage or other debt payments, schedule some time to talk to a bankruptcy attorney. Sooner is always better than later. Together, you can figure out the best plan for solving your problems and getting your financial life back in order.