What happens to my home if I file for bankruptcy during a foreclosure?

If you file for bankruptcy while your home is in the process of being foreclosed on, the foreclosure process will be put on hold (known as a ‘stay’). The stay prohibits your lender from continuing with the foreclosure process until the bankruptcy court determines whether to grant you a reprieve or not. Once you file for bankruptcy, your lender must go to the bankruptcy court to get permission to continue with the foreclosure process. The court will decide if the creditor is allowed to proceed with foreclosing on your home. If the court rules in favor of the creditor and grants permission to move ahead with the foreclosure process, normally the foreclosure will continue where it left off prior to your bankruptcy filing. If the court rules in your favor, the court may choose to restructure your loan and debt, protect your home from foreclosure, or extend the time you have to pay back your debt. If you have filed a Chapter 13 bankruptcy, you usually will be allowed to keep your home as you pay off your debt to the court over a 3-5-year period. If the court finds that you do not have the financial means to pay back your debt, your home may be sold at an auction or returned to the lender. In any case, it is always best to speak to an attorney to better understand your rights and options before filing for bankruptcy.

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What happens to my home if I file for bankruptcy during a foreclosure?

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