If I file for bankruptcy will the foreclosure stop? 4 Answers as of August 19, 2010

Will my home still be auctioned off if I file for bankruptcy? Will I be able to have my loan modified if I file? Is there a certain kind that can stop foreclosure?

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Fasel, Fasel, & Nefulda, LLP
Fasel, Fasel, & Nefulda, LLP | Thomas Fasel
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
Law Offices of Juan Dotson
Law Offices of Juan Dotson | Juan Dotson
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
Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
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
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
Yes, a bankruptcy can stop a foreclosure.
Answer Applies to: California
Replied: 8/18/2010
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