Legal Question in Bankruptcy in United States

Usually not, but only an in-person consultation with a bankruptcy lawyer will enable you to explore what can and can't be done. Certainly a BK filing will stop all foreclosures, which might at least buy you some time.

In most cases a bankruptcy filing stops foreclosure. Depending on facts you did not post that may be a temporary or permanent benefit. You may be able to use Chapter 13 to catch up a delinquency, or Chapter 7 to buy time to work out a loan modification.

See a lawyer in your state to see if either would work for you.

No. Although a bankruptcy stops any active attempts to foreclose, the "stay" is not permanent. At the conclusion of the bankruptcy, the bank or mortgage company can get their property, i.e. the house back. If you have equity in your home it can make the process more complex because you may claim certain exemptions in your bankruptcy petition. Another consideration is to "reaffirm" the debt. Either way, banks/mortgage companies are more apt to offer loan modifications as opposed to taking their property back (particularly in this market). This may require you to extend the repayment period of your loan and/or it may effect your interest rate.

When do you plan on filing for bankruptcy?

One benefit from filing a bankruptcy is the Automatic Stay which in included in the Order for Relief issued upon filing. This order prohibits advancement of a foreclosure or other collection activity. The Chapter 7 filing will buy some time and perhaps a softer attitude from the creditor. The Chapter 13 filing accommodates a cure of the default over a period of time between 3 years and 5 years. The creditor who is secured with a lien on real property or a manufactured home only will be entitled to payment in full over the time of the plan. That is, the debtor pays the full, regular payment, plus an amount each month that is calculated to pay fees, costs and cure the default. The result is emergence from the bankruptcy current on the real estate and free of unsecured debt. Of course, bankruptcy must be considered only in the bright light of all the circumstances and only after exhausting other relief that the lender may be willing to grant and after review of the documents to see that the lender has a valid lien. Your bankruptcy lawyer is the first place to start.

The answer is "it depends."

If you are thinking of filing a Chapter 7, can you catch up on all your past due mortgage payments within 90 days? If not, Chapter 7 will only delay an inevitable foreclosure.

If you are thinking of filing a Chapter 13, do you have enough money in your budget to resume making your mortgage payments and make a payment to apply towards catching up on your past due mortgage payments? If so, then this would be an opportunity to stop the foreclosure and allow you to save your home.

There may be other options to let you keep your home, so certainly consult with an experienced bankruptcy attorney right away.

Hope this perspective helps!

Chapter 13 might allow you to pay the arrearage owed on the home loans over the course of 5 years if you have sufficient resources and can begin making the regular payment at the same time. All your other debts would be dealt with in the Chapter 13 also.

A Chapter 7 woudl only buy you some additional time.