If You’re Facing Foreclosure,
You Still Have Options.
This does not have to be the end of your journey.
There may still be time to protect your home and find a way forward.
Federal bankruptcy law provides important protections for people facing serious financial hardship — including the Automatic Stay, which can stop a pending foreclosure when a bankruptcy case is filed in time.
We’ll show you how the protection works, explain the bankruptcy options that may be available, and walk you through the process step by step so you can better understand what to do next.
A Pending Foreclosure May Still Be Stopped
Seeing a foreclosure date on the calendar can feel final. But if the sale has not yet taken place, there may still be an important federal protection available.
The Automatic Stay Can Create Breathing Room
When a bankruptcy petition is filed, the Automatic Stay generally begins automatically and stops most collection activity.
For a homeowner with a foreclosure still pending, that protection can include stopping the foreclosure process while the bankruptcy case moves forward.
Scheduled Does Not Mean Completed
A foreclosure date may already be scheduled and there may still be time to act before the sale occurs.
The Protection Begins With Filing
The Automatic Stay is one of the protections built into federal bankruptcy law and generally arises when the bankruptcy petition is filed.
Timing Matters
The closer the foreclosure sale is, the more important it becomes to understand what protection may be available and what must happen before the sale.
Not always. Federal law includes exceptions, and previous bankruptcy filings can affect how the Automatic Stay applies. The important point is to understand your situation before the foreclosure sale takes place.
The Important Thing to Know: There May Still Be Time.
The next step is understanding the two bankruptcy chapters most commonly considered by individual homeowners and how differently they work.
SEE THE TWO BASIC OPTIONSChapter 7 and Chapter 13 Work Differently
Both can trigger the Automatic Stay when a case is filed, but what happens after that can be very different.
A Pause Does Not Always Mean a Long-Term Way to Keep the Home
A Chapter 7 filing generally triggers the Automatic Stay and may temporarily stop a pending foreclosure. But Chapter 7 normally does not provide a long-term plan for catching up missed mortgage payments.
THE SIMPLE DIFFERENCE
Chapter 7 may provide immediate protection from collection activity, but it is generally not the bankruptcy chapter designed to cure mortgage arrears over several years.
A Possible Path for Homeowners Who Want to Keep Their Home
For an eligible homeowner with regular income, Chapter 13 may provide a way to stop a pending foreclosure and catch up past-due mortgage payments through a court-approved repayment plan.
WHY HOMEOWNERS LOOK AT CHAPTER 13
Mortgage arrears may be addressed through a repayment plan, typically lasting three to five years, while the homeowner continues meeting the requirements of the bankruptcy plan.
These are general differences, not a determination of which bankruptcy chapter is right for any particular homeowner. Eligibility, income, property, mortgage arrears and prior bankruptcy filings can all affect the available options.
Stopping a Foreclosure Starts With Acting Before the Sale
The process may sound complicated, but you do not have to understand every bankruptcy rule before taking the first step. What matters most is knowing that time matters and preparation matters.
If a foreclosure sale is approaching, do not assume that the scheduled date means nothing can be done. The opportunity to use bankruptcy protection can depend on taking action before the foreclosure sale is completed.
Start With the Foreclosure Sale Date
Locate your foreclosure notices and determine whether a sale has been scheduled. The amount of time remaining can affect what options may still be available.
Put Your Important Information Together
Mortgage and foreclosure notices, income information, debts, assets, bank information and tax records can help provide a clearer picture of your financial situation. You do not have to organize everything perfectly before asking for help.
Credit Counseling Comes Before Filing
Federal law generally requires individuals to complete credit counseling through an approved provider before filing bankruptcy. Limited exceptions can apply.
File the Appropriate Bankruptcy Case in Time
When an appropriate bankruptcy petition is properly filed before the foreclosure sale, the Automatic Stay generally takes effect and can stop the pending foreclosure while the bankruptcy case proceeds.
You Do Not Have to Figure This Out by Yourself
Individuals are permitted to file bankruptcy on their own, but bankruptcy law and procedure can be complex. An experienced bankruptcy attorney can evaluate the timing, help determine which bankruptcy chapter may fit the situation, prepare the required filing and explain how the Automatic Stay applies to the pending foreclosure.
You Don't Have to Know Everything Today. You Just Need to Know Your Next Step.
If your foreclosure sale has not yet taken place, there may still be time to understand your options and determine whether bankruptcy protection can help.
SEE WHAT YOUR NEXT STEP COULD BENow Find Out What May Be Possible For You.
A scheduled foreclosure does not necessarily mean the opportunity to act has passed. If the sale is still pending, the next step is finding someone who understands both bankruptcy protection and the importance of foreclosure timing.
You Don't Have to Make This Decision Alone.
BKForeclosure.com helps you take the next step by identifying bankruptcy attorneys serving homeowners in your state. You can learn about your state's foreclosure process and look for a participating provider who handles bankruptcy matters involving pending foreclosure.
You have already taken an important first step by learning that scheduled does not mean completed. If your foreclosure sale has not yet occurred, now is the time to find out whether bankruptcy protection may be available in your situation.
FIND BANKRUPTCY HELP IN YOUR STATE →You'll continue to BKForeclosure.com, our companion resource for state foreclosure information and participating bankruptcy providers.