You and your family are facing foreclosure. You have missed multiple mortgage payments because you have an overwhelming amount of debt. These could include medical bills, student loans, car loans, credit card debt and much more. You cannot pay everything, so you have been missing mortgage payments, and now your lender wants to foreclose on the house.
You have been considering declaring bankruptcy because you think that it may help you address your debt. Is this a viable way to prevent the foreclosure? Is it a solution that will allow you to keep your home?
A short-term solution
Bankruptcy can be a solution in the short term because it creates an automatic stay. This is a court order stating that the foreclosure, along with any other financial cases against you, cannot continue until after the bankruptcy case has been resolved.
In other words, your lender may be thinking about foreclosing on your home starting this month. But if you file for bankruptcy and it takes six months to work through the case, that is six months in which they cannot even start foreclosing on the property.
However, once the bankruptcy ends, the automatic stay will be lifted. As you go through the bankruptcy process, then, you need to focus on ways that you can reduce your debt or perhaps consolidate it—either by using Chapter 7 or Chapter 13 bankruptcy—to make those mortgage payments affordable again. If you still fail to pay after the bankruptcy, the foreclosure can simply resume.
These types of financial situations are very complicated, so be sure you know what legal steps to take.