If you plan to file for bankruptcy but are also facing foreclosure, the timing of your bankruptcy can make a difference for you, depending on what you want to do with your home. In some cases, you should file for bankruptcy first, before the foreclosure sale occurs.

Does bankruptcy save you from foreclosure?

The moment you file for bankruptcy relief (including an emergency petition) an automatic stay goes into effect that prohibits your lender from going forward with the foreclosure sale. Bankruptcy can delay or stop the foreclosure process as long as the home hasn’t been sold.

Can I lose my house in bankruptcy?

If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy – as long as you continue to pay the mortgage. It may be that after you are free of all the rest of your debt you will be able to afford the mortgage payments easily. If so, you’ll be able to keep your house.

Is it better to file bankruptcy before foreclosure or after?

If your lender comes after you for the deficiency, and you later file for bankruptcy, bankruptcy will discharge(eliminate) the deficiency debt. But for many people, it makes more sense to file bankruptcy beforeforeclosure to discharge the mortgage debt preemptively. Then you don’t have to worry about the possibility of a deficiency judgment.

What happens if I file bankruptcy before my house is sold?

If you file for bankruptcy before your home is sold at a foreclosure sale, you’ll get more time to live in the home. When you file bankruptcy, an “automatic stay” goes into effect.

When do you get Your House back after a foreclosure?

Lenders might say that you can reinstate the loan anytime after the “Notice of Sale” up until the foreclosure date (the sale date) and stay in the home if you make all (or a substantial portion) of your missed payments and cover the legal fees and penalties charged so far.

What’s the best way to get out of foreclosure?

One way to avoid foreclosure is to sell your home (with the help of an experienced agent) and net enough to pay off everything you owe the lender, including back mortgage payments, penalties, and fees. You won’t own your house anymore, but you won’t have the house foreclosed upon, which would do serious damage to your credit.