Does Filing Bankruptcy Stop Foreclosure?
When you file a bankruptcy petition an automated stay is granted. Depending on the bank the foreclosure process can take between four months and one year.
Understand the bank does not wish to foreclose on your house. Each house that they have on their books is thought of as a liability. If you talk to your bank as fast as you realize that you’re going to be having issues with your payments, you can work something out. But ensure you try all of the options available to you before filing bankruptcy. If you can’t keep up with your bankruptcy payments, the stay could be lifted and your case discharged.
When filing bankruptcy to stop foreclosure you set up a repayment schedule thru the courts. You make arrangements to repay all your balance and any late charges up till the time of the filing. You also need to start back making your ordinary home loan payments. If you’ve got the chance to sell your house, even if it is a short sale, it’s way better than walking away with nothing.