Can bankruptcy stop a foreclosure from happening?
In some cases, a bankruptcy will stop a foreclosure at least temporarily. However, this is not always the best case scenario for everyone. With a bankruptcy filing, the individual gives up all control over his affairs. The bankruptcy trustee is in charge of all procedures and takes the decision making process out of the hands of the homeowner. With a Chapter 7 bankruptcy, the trustee is collecting, selling and distributing the proceeds among the creditors. With a Chapter 13 bankruptcy, the trustee arranges with the individual filing bankruptcy to put into place a repayment plan that is based upon current assets including property, income, and savings. Either way, the homeowner is no longer in control. Loan Modifications 1 allows you to stay in control, while working out a viable plan with your mortgage lender.
