Yes, bankruptcy will stop foreclosure. Of all the methods people pitch, bankruptcy is the only one that is guaranteed to work.
The reason bankruptcy is so effective in stopping a foreclosure is because of the “Automatic Stay,” which says that all collection activity on all of your debts is automatically stopped (or “stayed”) the minute you file bankruptcy.
If I file a Chapter 13 bankruptcy for you, it can stop the foreclosure permanently. Chapter 13 gives you a method of paying back the total amount you are past due on the mortgage, and you can pay back that arrearage over 36-60 months. If you can resume paying your mortgage every month on a going-forward basis, plus the modest Chapter 13 payment, you can get the whole past due paid off and stop the foreclosure forever. Chapter 13 is a great solution that will for sure stop the foreclosure, and can keep it stopped forever.
If I file a Chapter 7 bankruptcy for you, you should expect that bankruptcy to stop your foreclosure for approximately 60 days. That’s about how long it will take your mortgage company to come into your bankruptcy case and file a “Motion for Relief from the Automatic Stay.” Once the court grants the motion, they can post your house back up for foreclosure. In Texas, they have to give you at least 21 days notice of the foreclosure. So 60 is a pretty safe estimate of the total amount of time you can postpone foreclosure by filing Chapter 7 bankruptcy.
There are other ways to stop a foreclosure, of course. Things such as forbearance, modification, short sale, and the like. Bankruptcy is the only one that uses the Automatic Stay, and the only one that works all the time for all people in all situations.
When you’re ready to get out from under the crushing debt load and begin a new debt-free life, contact Dallas bankruptcy lawyer Rustin Polk by clicking here. Tell our Appointments Coordinator, Kimberly, that you are a website reader and she will set you up with a free, no obligation appointment to learn how we can help you get out of debt.