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.

What comes first bankruptcy or foreclosure?

You’ll most likely gain more if you file for bankruptcy before your home is foreclosed. For one thing, you’ll prevent the lender from getting a deficiency judgment if one is allowed in your situation. You’ll also get to stay in your house longer than if you let the foreclosure happen and later file bankruptcy.

What happens if I file for bankruptcy before foreclosure?

You’ll most likely gain more if you file for bankruptcy before your home is foreclosed. For one thing, this way you’ll prevent the lender from getting a deficiency judgment (if one is allowed in your situation). You’ll also get to stay in your house longer than if you let the foreclosure happen and later file bankruptcy.

Do you have to give up your property if you file bankruptcy?

If you file for Chapter 7 bankruptcy, you don’t have to repay any debt. Instead, you must give up any property you own that isn’t exempt under your state’s law (or the federal bankruptcy exemptions, if your state allows you to use them instead).

Can you still live in your house if you file bankruptcy?

You can live in your home without making any mortgage payments during the bankruptcy—at least until the lender obtains relief from the stay and completes the foreclosure. Or the lender might forgo this right and simply wait for the bankruptcy case to conclude before continuing with the foreclosure.

When do you need to disclose your bankruptcy?

And because bankruptcy filings are a matter of public record, anyone can search for it. But most people won’t go to that trouble, and you won’t need to disclose your bankruptcy unless explicitly required, such as on an application for credit, employment, or security clearance. Learn more about life after bankruptcy.