Does filing for bankruptcy stop foreclosure proceedings?

Yes, filing for bankruptcy can stop foreclosure proceedings. This is because a bankruptcy filing puts an “automatic stay” into effect, which stops the foreclosure process, and gives the debtor time to either pay off their debt or reorganize it. The automatic stay prohibits creditors from taking any collection action without court approval. Creditors have to wait until the debtor’s bankruptcy is complete for the automatic stay to be lifted. In Washington State, when a homeowner files for bankruptcy, the foreclosure process is automatically frozen, which gives the homeowner more time to make arrangements to catch up on their mortgage payments. The bankruptcy code prohibits creditors from collecting debt from a debtor in a bankruptcy proceeding. This includes foreclosing on a borrower’s house. However, the lender can request permission from the bankruptcy court to proceed with foreclosure, if the debtor’s mortgage is more than 90 days past due. In some cases, filing for bankruptcy can even help the debtor stay in their home. If the homeowner qualifies for Chapter 13 bankruptcy or a loan modification, they may be able to keep their house. Chapter 13 bankruptcy has provisions which allow the debtor to pay off their overdue mortgage payments, spread out over a period of three to five years. In conclusion, filing for bankruptcy will stop foreclosure proceedings and gives the debtor time to either pay off their debt or reorganize it. It also provides the debtor with options to stay in their home and work out a repayment plan with the lender.

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Does filing for bankruptcy stop foreclosure proceedings?

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