How Does Bankruptcy Stop Foreclosure?
As soon as you file bankruptcy, an automatic stay goes into place. This sends a message to creditors that they must stop all actions against you, including foreclosure. Both Chapter 7 and Chapter 13 can stop foreclosure. Of course, we understand that you do not simply want to prevent foreclosure. You want to make certain that you will be able to keep your home. As long as your payments are current, or you are able to catch up by the time of filing, you have a very good chance of keeping your house out of foreclosure. Chapter 13 bankruptcy opens the door to an additional option that can help you catch up on your payments. This option is the second mortgage scrape off. If your home is currently worth less than the amount of the first mortgage, you may be able to eliminate a second mortgage, if you have one.
