You and your spouse have lived in the same home for a decade. You have two kids together, and they’ve grown up in that house. It’s a place of comfort and stability for all of you. The children have never considered living anywhere else or thought about having to leave “their” house.
You have, however, because you know that things are getting tight financially. The recession caused you to lose your job, and now the lender is threatening to foreclose on your house. If you file for bankruptcy, can you stop them from taking it?
Bankruptcy does create a delay
When you file for bankruptcy, it at least delays the foreclosure by creating an automatic stay on that case. Think of it like pushing pause. The foreclosure isn’t eliminated or erased, but it can’t move forward until you are done with the bankruptcy case.
Foreclosure already takes months before you have to leave the home. Bankruptcy can also take months. People sometimes do this to buy time.
Additionally, bankruptcy can help you save your home in the long run. Maybe you’d be able to pay that mortgage without all of your other debt, for instance. If you eliminate that debt through bankruptcy and then get caught up on your mortgage, your lender won’t foreclose and you’ll keep your house.
Or, perhaps you’ll buy enough time to get a new job. Then you can use Chapter 13 bankruptcy, which looks at your income and consolidates your debt into a single repayment plan. The idea is that this plan will be affordable on your new budget, allowing you to slowly pay what you owe. Again, that can mean keeping the house.
How do you get started?
As you can see, bankruptcy doesn’t instantly stop a foreclosure, but it’s still one of the most useful tools you have in this situation. You must know exactly what steps to take to begin the process. It can help to work with experienced professionals who have done so before.