How bankruptcy helps in Foreclosure ?

[jordenjex915]

Hello to all, i am reading a little about this and i saw a question actually.

The question says. "how bankruptcy stop a foreclosure" , so i thought it is good to ask it here.

It says that it can partially help for a couple of months and i think you guys can help me more about it.

Thanks

[bcohen]

Bankruptcy doesn't stop foreclosure, but if you time your filing appropriately, it can delay the foreclosure for several months--or more--thus allowing you to remain in the house payment-free. For example, if you file for Chapter 7 a month to two weeks before the date of the sheriff's sale, then the automatic stay prevents the house from being sold, so the sale is canceled.

As long as you don't* put "surrender" on your Statement of Intentions, the lender would need to file to lift the automatic stay, or wait until the discharge (which is at least 4 months down the road) before starting the process again. Most mortgage lenders do not bother trying to lift the stay. This means that after you have filed, you could expect to live in the house for another 6 months or more without paying any rent or mortgage, and hopefully saving the money for when you eventually do have to move.


* Technically, even if you do put "surrender" as your intention, the lender must still file to lift the stay, however it is much easier and less costly for them to do so if they can argue that lifting the stay is merely a formality because it is your intention to surrender the property anyways.