How can a bankruptcy help stop home foreclosure?
The automatic stay stops home foreclosures, as well as other debt collection activities. However, the bankruptcy laws do have built in protections for secured creditors, such as mortgage holders. So, a Chapter 7 or 13 filing will interrupt, but doesn t eliminate a mortgagee s legal rights to ask the bankruptcy court for relief from the automatic stay to resume foreclosure proceedings. The bankruptcy judge has the final say. There are few key criteria. First, how much you equity you already have in your home. The greater the amount, the better your chances of successfully fighting a foreclosure. A second criteria focuses your ability to make future monthly payments. If you can, the greater your chances to negotiate a favorable out-of-court resolution with the mortgage holder. For example, under a Chapter 13, payments for defaults prior to bankruptcy can usually be spread out over a period of time. Working out mortgage problems and preventing future foreclosure proceedings represent a ma
