Over the past few months, the rate of house foreclosures has dropped a bit. However, some people are still living under the threat of losing their homes. They’re at the point where nothing else has helped save their house, so they’re now looking at how to answer the question, “Can filing bankruptcy stop a foreclosure?” The following information will provide some insight to that inquiry.

Phoenix, AZ -- (SBWire) -- 10/25/2012 --The simple answer to can filing for bankruptcy stop foreclosure is yes, it can. Depending on which type of personal bankruptcy one files, foreclosure proceedings can either be delayed long enough for the family to save enough money to move to a more affordable abode or stopped altogether. There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Foreclosure proceedings generally begin after a homeowner has fallen quite a bit behind on his mortgage payments, is unable to catch up the missed payments, does not qualify for loan modification or refinancing, and cannot afford to move.

Can Filing Bankruptcy Stop A Foreclosure , Know More Information

If one files for Chapter 7 bankruptcy, it can delay the foreclosure for several months. Once a homeowner files for bankruptcy, an “order for relief” is handed down by the court. This means that neither the bank nor any other creditor can attempt to collect from the filing person. The “order for relief” can place a stay on foreclosure proceedings for three to four months. During this time period, a homeowner can try to save up enough money to move to another, more inexpensive house. Chapter 13 personal bankruptcy can stop foreclosure proceedings. Filing Chapter 13 allows one to repay the “arrearage” (the missed payments) over a length of time that person proposes, up to five years in some cases. This positively answers the question “Can filing bankruptcy stop a foreclosure?” The individual will have to prove he is able to meet the arrearage amount and that he can stay current on monthly mortgage payments.

The differences between the two types of personal bankruptcy, aside from the fact that Chapter 7 only delays a foreclosure while Chapter 13 can stop it, are the eligibility requirements. One cannot file for Chapter 7 bankruptcy if his total income over the six months before his filing date is more than the median amount for a household of his size in his state. One also cannot file Chapter 7 if one’s disposable income, after deduction of certain expenses and monthly debt payments, is greater than the amount determined by the laws of his state.

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