There are a few different ways to stop foreclosure if you’ve gotten the notice and you want to keep your house. Of course, the best thing to do is to see if you can get current on your mortgage payments once again. Most lenders would prefer for you to get current, rather than taking the home and selling it to someone else. This is generally far less lucrative to them, and they only do it if there is no other choice.
But you may have heard people say that an easy way to stop foreclosure is just to declare bankruptcy as soon as it happens. Is this true?
Bankruptcy creates an automatic stay
Bankruptcy certainly can be helpful if you’re facing foreclosure. It creates an automatic stay, which will put an end to your foreclosure case – but only for a time. Rather than ending the case, it’s more like putting it on pause.
Legally speaking, the bankruptcy case has to take precedence. This is why the court creates the automatic stay. They do not want the foreclosure to continue until the bankruptcy has been resolved.
In this sense, bankruptcy can help allow you to get current on your mortgage again. Perhaps you were missing mortgage payments because you had other outstanding medical bills or credit card debt. If bankruptcy helps you consolidate these or eliminate some of your debts, then you may be able to make those mortgage payments again in the future.
Exploring your options
Bankruptcy can be complicated, and many people are looking into it for the first time. If you are, be very sure that you understand all the legal options you have and how they may help in your specific situation.
