Can Bankruptcy Stop Foreclosure?

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If you’re facing foreclosure, you might feel like you’d do anything to stay in your home. You may even begin wondering, “Can bankruptcy stop foreclosure?”

By understanding how to use bankruptcy to stop foreclosure and working with Ohio’s experienced foreclosure lawyer, you’ll have a better chance of keeping your home.

Does Bankruptcy Stop Foreclosure?

Yes, bankruptcy can stop foreclosure immediately in many cases. One time it won’t is if you filed for bankruptcy multiple times in the previous year.

Your home will be subject to an automatic stay as soon as you file. This has a few positive effects:

  • Gives you legal protection from foreclosure during the stay
  • Stops the foreclosure process
  • Stops most collection activities 

Bankruptcy’s impact on foreclosure varies depending on which chapter of bankruptcy you file.

Chapter 7 Bankruptcy

With Chapter 7 bankruptcy, the automatic stay is usually in place for three to four months. During this foreclosure halt with bankruptcy, you can work with a foreclosure attorney to figure out another way to save your home. 

Once the stay expires and your case is closed, the lender can continue with the foreclosure. With Chapter 7, you cannot make up missed payments.

The lender can also file a motion to lift the automatic stay. If approved, the stay will be lifted immediately, meaning you won’t get those months of protection.

So the answer to “Can bankruptcy stop foreclosure?” is yes, temporarily.

Chapter 13 Bankruptcy 

Because of the problems with Chapter 7, many people opt to use Chapter 13. In this case, you can catch up on payments and possibly keep your home.

Using Chapter 13 Bankruptcy To Stop Foreclosure Proceedings

If you’re working on preventing foreclosure through bankruptcy and want to keep your home, you must propose and follow a repayment plan.

Proposing a Plan

You’ll need to make a plan to pay off debts over a certain period, usually three to five years. You’ll need income to cover your debt payments, current mortgage payments, and living costs.

A bankruptcy judge, your creditors, and the trustee will review your plan. The judge can approve your plan at your confirmation hearing.

You’ll begin making payments about 30 days after filing your case. You’ll keep your home if you make all required payments during your plan.

Other Considerations

If you have a large amount of home equity, you may not qualify for bankruptcy and foreclosure prevention with Chapter 13 due to the homestead exemption. This can lead to higher payments, which may not be affordable.

If you have a junior mortgage, you may be able to eliminate it if the court recategorizes it into unsecured debt.

Navigate the Bankruptcy Process To Stop Your Foreclosure

Although the answer to “Can bankruptcy stop foreclosure?” is yes, navigating the process can be daunting. When you hire a foreclosure attorney from Cozmyk Law, you can make more informed decisions and have support in the fight to keep your home.

If you’re facing foreclosure and trying to figure out how to stop it, let Cozmyk Law in Cleveland, OH, help you. Call Cozmyk Law Offices, LLC at 877-570-4440 or fill out our online form for a consultation.


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