How do I Stop Foreclosure with Bankruptcy?
11 U.S.C. 362 states that upon the filing of a bankruptcy case, sale/transfer/lease/assignment of property must cease without leave of the bankruptcy court. This generally means that foreclosure cannot occur without bankruptcy court approval once a chapter 7 or 13 is filed. However, chapter 7 will not generally provide a long-term solution to keeping a house if a person is in foreclosure. Filing chapter 7 will provide temporary relief from foreclosure but generally a bank will be able to foreclosure a few months after filing a bankruptcy.
Chapter 13 on the other hand allows for a person to make an extra payment to the chapter 13 trustee, in addition to the regular monthly payment in order to save a home from foreclosure on a more permanent basis. For example, if a person were in foreclosure and were behind $5000 in home payments, a person could save the home by making extra payments in the amount of $165 per month in a chapter 13.
