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

If you are in the process of foreclosure in Virginia and you file for bankruptcy, the foreclosure process will be put on hold. The automatic stay provision in the bankruptcy code prevents creditors from collecting, seizing, or foreclosing on your property while the bankruptcy is being handled by the court. This includes foreclosure proceedings against your home. The amount of time the automatic stay remains in effect depends on the type of bankruptcy you have filed (Chapter 7 or Chapter 13) and the circumstances of your case. While the bankruptcy will delay the foreclosure process, it does not necessarily save your home from foreclosure. You will need to continue to make payments for your mortgage, and your creditors may still be able to continue foreclosure proceedings against you after the bankruptcy process is complete. In addition, if you are behind on mortgage payments, the arrearage may be discharged in Chapter 7 bankruptcy, but you will still need to catch up on payments or work out a payment plan as part of Chapter 13 bankruptcy. Ultimately, if you decide to file for bankruptcy during a foreclosure, it can be an effective way to pause the process and buy you some time to explore other options. However, you should remember that the bankruptcy alone may not save your home from foreclosure, and any arrearage will likely not be discharged. Therefore, you should carefully consider all your options, and speak with a professional if needed, in order to make the best decision for your financial situation.

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