Can Filing for Bankruptcy Stop Foreclosure?

Written by Timothy Czekaj

If you’ve fallen behind on your bills, you know how stressful it can be. Collection agencies call multiple times a day, threatening you with legal action if you don’t pay them. Even worse, the bank might have informed you that your failure to pay your mortgage will result in you losing your home. When times are tough, filing for bankruptcy may help you get rid of some smaller debts like credit cards, allowing you to breathe easier. But can a bankruptcy stop foreclosure on your house?

Questions about foreclosures and debt relief are best answered by experienced PA bankruptcy lawyers, such as the team at Czekaj Law, LLC. We have extensive knowledge in the area, and we have helped numerous residents of Central Pennsylvania take control of their debt. If you would like a no-cost consultation of your case, call us today at (717) 275-9770 , or use our online form.

Automatic Stay

No matter if you file for Chapter 7 or Chapter 13 bankruptcy, you will receive an automatic stay from the bankruptcy court. An automatic stay stops debt collectors from being able to contact you for payment while your case is under review. This means the bank is unable to continue with the foreclosure process until your bankruptcy case has been closed, or until the bank receives relief from the automatic stay.

It’s important to remember that an automatic stay doesn’t eliminate foreclosure proceedings; it just puts a temporary hold on them. You should also know that some banks may be determined to continue with foreclosure proceedings, so they will file a motion to lift the automatic stay. In this instance, they will make a case to the bankruptcy court concerning why they should be permitted to continue your foreclosure case. If their motion is granted, your automatic stay will not pertain to your foreclosure.

The Foreclosure Process

The process of foreclosure is often long and stressful. In Pennsylvania, the bank must follow three steps:

• Step One. Initially, you will be sent a demand letter. This document informs you that you are in default on your mortgage, and it explains what can be done to cure the default as well as potential consequences of not curing it.
• Step Two. If the default has not been cured, you will then receive a Notice of Intent to Foreclose. This notice is sent 30 days in advance of the filing, in order to give homeowners another chance to cure their defaults.
• Step Three. If the mortgage payments are still behind, the bank is then able to file a foreclosure lawsuit.

When you are having trouble curing your default but you would still like to keep your house, you may want to consider filing for bankruptcy to temporarily stop foreclosure.

Emergency Petition

If you are far along in the foreclosure process and you don’t have time to file all of your bankruptcy paperwork, you may be able to file an emergency bankruptcy petition. This allows you to file only a portion of the necessary paperwork so you can get your automatic stay in place. After that, you will be given 14 days to file the rest of the documents.

Emergency bankruptcy petitions could come in handy for Pennsylvania homeowners who are a few weeks, or even a few days away from losing their homes. Talk to an experienced bankruptcy lawyer to see if you can file for emergency bankruptcy relief.

You Can Save Your Home – But Should You?

You likely have an emotional connection to your home, and when you’re faced with the threat of losing it, you may try to do everything possible to keep that from happening. But before you go through every option to hold onto your home, you need to make sure it’s actually a good decision. For example, if you file for a Chapter 13 bankruptcy so you can modify your mortgage payments and keep your home, you must be certain that you can afford to do so. If you fall behind on these payments, the bank could still foreclose on your home.

Talk to a Pennsylvania Bankruptcy Lawyer About Your Options

Are you currently asking yourself, “bankruptcy stop foreclosure?” Using bankruptcy to stop foreclosure is certainly possible, but you need to determine if it’s the right thing for you to do. Talk to the bankruptcy lawyers at Czekaj Law, LLC first to make sure you’ve explored all your options. You can schedule a free, initial consultation by calling (717) 275-9770 , or using the online contact form.