The reason why so many homeowners file bankruptcy due to falling behind on their mortgage payments is that filing bankruptcy can delay foreclosure. Depending on your specific situation, your home could be saved by filing bankruptcy or it could just be delaying the inevitable: foreclosure.
Surviving Bankruptcy and Foreclosure
NOTE: If your mortgage lender has already started the foreclosure process and you file bankruptcy without warning then they could file a motion with the bankruptcy court to have the “automatic stay” lifted. The automatic stay is what prevents creditors from continuing collection activities during the bankruptcy process.
No matter the scenario, it is possible to go through a bankruptcy and then have your house foreclosed on after the bankruptcy has ended and the automatic stay has been lifted. Generally speaking, you will have a long, hard road ahead of you if you wish to purchase a home in the future. It could take several years and it could come at a high down payment.
That is why it so crucial to pay all your bills on time and, if you do fall behind, you take proactive steps right away in remedying the situation. Talk to a credit counselor or licensed bankruptcy attorney today about life after bankruptcy and foreclosure.