Once you file for Bankruptcy, you will have an automatic stay against foreclosure. However, in some situations in Chapter 7, creditors (the mortgage owner) can successfully request that the court remove the stay so it can proceed with foreclosure. If you are behind on your mortgage payments when you file for Chapter 7 bankruptcy, you will almost certainly lose your home to foreclosure unless you can get current in a hurry.

If your lender has started foreclosure, you can file Chapter 13 and make up your missed payments, reinstate the loan, and keep making the payments under the original contract. The right to cure the default is dependent on how far along the foreclosure proceeding is.

Most lenders will continue to consider a modification even after Bankruptcy has been filed.

To discuss further, please contact us.

Answer Applies to: California
Replied: 8/19/2010

Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.

If you qualify and file your bankruptcy correctly, the foreclosure sale will stop/be delayed. Whether or not you can stay in your home and modify your loan requires a consultation with a foreclosure defense professional. Call my office immediately; bankruptcy is not always the best approach in dealing with foreclosures.

Answer Applies to: California
Replied: 8/18/2010

Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.

In general, filing bankruptcy will stop a foreclosure. The question is for how long. A Chapter 7 gives only temporary relief, as the creditor can wait until you receive your discharge (typically about 4 months) or move for relief from stay in order to get permission to continue with the foreclosure (typically 1 - 3 months). A Chapter 13 or Chapter 11 has the potential to give more permanent relief.

For example, in a Chapter 13 the debtor can catch up on back mortgage payments over 60 months. Cases in which there are multiple bankruptcy filings regarding the same property are disfavored by judges, and can result in in rem relief, meaning that no future bankruptcy proceeding regarding the property.

Filing bankruptcy does NOT modify your loan. In certain cases, as in a Chapter 13 in which the value of the home is less than the outstanding amount of the first mortgage, you can lien strip and convert the second to unsecured debt.

Answer Applies to: California
Replied: 8/18/2010

Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.

Yes, a bankruptcy can stop a foreclosure.

Answer Applies to: California
Replied: 8/18/2010

Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.