How Can You Avoid Losing Your Home in Bankruptcy?

When you are facing bankruptcy and are struggling to make ends meet, something that you may be worried about is keeping your home. Will the bank foreclose on the home? Is there a way to protect my home from foreclosure? 

The good news is that there may be different ways to save your property from foreclosure and to keep it following after filing for bankruptcy.

Will I Lose My Home If I File for Bankruptcy?

Not everyone will lose their home when they file for bankruptcy. There are many factors that go into determining whether you are able to keep your home, such as:

  • How far into foreclosure is your home? If you cannot make your next payment or already received a Notice of Default, you may still be able to file for bankruptcy and save your home. Unless your home has already been sold in auction, bankruptcy can stop the foreclosure process.
  • Are you current on your mortgage? If you’re current on your mortgage and are going into bankruptcy, you can choose to keep paying your mortgage and keep your property. The bankruptcy can address other debts you have, like credit debt, medical bills, or loans instead. 
  • Are you behind on payments? If you have missed payments on your mortgage, you and your attorney may be able to renegotiate the terms of your mortgage, so that you can catch up on what’s owed overtime. Chapter 13 bankruptcy is particularly good for this since it can help address foreclosures.
  • Can you afford to keep up with your mortgage? You may be already struggling to pay what you owe and may not have the money to continue paying your loan. In this case, a foreclosure is possible unless you’re able to negotiate time to make up payments or are able to start making your payments. 

Can You Stop a Foreclosure Once It Has Begun?

Yes, if foreclosure is in process, you can still stop it. A bankruptcy will stop a foreclosure, along with any other collections activities, immediately. That’s great if you need some time to work out how to address the mortgage payments you’ve missed or if you’d like to renegotiate your loan with your lender moving forward. Your attorney can help you with all of this while you work through your bankruptcy together.

Call us today if you are at risk of losing your home and need legal help immediately.