If you’re in danger of foreclosure, it is likely because you’re having financial troubles that have made it difficult to pay your mortgage. Missing one payment isn’t going to trigger a foreclosure case, most of the time, but missing a few payments in a row certainly can. The lender will decide to reclaim the home if it becomes clear that you’re not going to be able to pay.
But since you’re having this financial trouble, you may be considering bankruptcy. There is one key way in which a bankruptcy filing can help with a foreclosure, even stopping it for a time.
The automatic stay
The way that it works is that filing for bankruptcy puts an automatic stay on other cases that you have going at the same time. That would include a foreclosure case, which is also a financial issue. An automatic stay essentially puts that case on hold or pauses it until the bankruptcy has been finalized.
However, the automatic stay will not stop foreclosure indefinitely. Eventually, the automatic stay will be lifted and the foreclosure can resume again.
So the key is to use the bankruptcy filing to eliminate some of your other debts or to re-organize the debts that you still hold. This may make it possible for you to afford your mortgage payments again and get current with any missed payments. In that sense, bankruptcy can help to stop a foreclosure. It is a key part of the process.
Your legal options
This type of situation can get fairly complicated, so be sure you know exactly what legal steps you will need to take. Understanding your options and obligations can help you work toward the best possible outcome.