Bankruptcy to prevent foreclosure?

Hang tight. There'll be somebody along shortly with more knowledge than I've got.

I do know that if you file bankruptcy, your attorney needs at least 2 weeks to successfully stop any foreclosure sales. For instance, if the sale date is April 10th, then your bankruptcy attorney needs 2 weeks prior to that to stop the sale.

We have been thru the same thing. Bankruptcy will stop the foreclosure for a time and you may be able to re-negotiate with your bank. The bottom line may be that the bankruptcy and foreclosure probably will go hand-in-hand. You really need an attorney to help you. We finally had to hire an attorney for our financial woes. You are really in a hard place. I hope you will find some relief.
Have you thought about borrowing from a private source?...interest is usually VERY high - my sister had to pay 20% to save her home once.

Guest -

Yes, bankruptcy will stop a foreclosure - and if you file for Chapter 13, it will allow a repayment plan for repayment of the arrearages on your mortgage. (Chapter 13 is the only form of bankruptcy that will stop your foreclosure and allow you to keep the house.)

HOWEVER....

This is a major step, and has many drawbacks.

Your credit will be affected in a major way - for a very long time. (But if you are facing foreclosure and your credit is already damaged, as you mentioned in your post, it may not be a big issue for you. I only mention it because some might not be aware of the impact on their credit.)

You will end up paying out all of your "disposable income" (determined by the courts, not you!) to the trustee in payment of your debts for the next three to five years. Can you live with that? Can you adjust to having a much smaller paycheck than you have now? Keep in mind, though your debts and house payment will be paid through the Chapter 13 payment plan, you will still be incurring new bills during that 3-5 year period. Doctor bills. Car and home repair bills. New clothing. Holidays & birthdays. Vet bills. All of these things can and will come up during that 3-5 years that you are in the plan, and have less money to work with than before. You must consider this when considering Chapter 13.

Your attorney will be paid first. And it will be a sizeable chunk of change. Most likely the first 6-8 months of your plan payments will go directly from the trustee to the attorney. Then, and only then, will your debts start getting paid. This means the foreclosure may be stopped, but your mortgage will go unpaid until the attorney's fees are paid in full first.

I'm not trying to discourage you from filing bankruptcy to save your home, if that's your only option. But I want you to be aware of the things that will happen if you do file. And I'm not talking about something I haven't experienced myself. Been there, done that.

I hope this helps give you a little more insight into the Chapter 13 situation. It's not impossible to save your house this way, but it is a major, life-changing event, and you need to be aware of all the details. Please seek counsel with a bankruptcy attorney ASAP if you are looking to save your house, so they can fill you in on everything you need to do.

I agree with suebeehoeny70, it is going to be very tuff! I don't know how is your family situtation are you too attached to the house, how long have you been living in the house? . I was in the same boat and we decided to do a shortsale and not filed for bankruptcy, we listed the house with a realtor that does "shortsale"and we are renting a bigger house for less money than our mortgage payment was. Once the realtor talked with the lender they stop harrassing us and finally the house has sold (we don't get any money) but the loan will be marked paid in full. the new owner paid a lot less than we did for the home the realtor and lender came up with a settlement figure and that is what the house sold for. Now after one year of leasing this house we will have the option to buy it.!

spanisheyes - Emotional attachment to the house can be a big issue for many people. And then there's the whole stigma of "losing" your house to foreclosure. But trust me, there are SO many people in the foreclosure trap right now, that not too many are being looked down on any more - in fact, it's become just an everyday occurrence. Sad, but true.

I agree with you suebeehoney70 right now es an everyday occurrence so the stigma will not be there much longer.