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When you file bankruptcy, an “automatic stay” goes into effect. Basically, an automatic stay is an automatic injunction which stops actions by creditors to collect debts from debtor goes into effect.
Unfortunately, however, bankruptcy is not always the right solution for your foreclosure problems. Although an automatic stay may temporally give you protection against your lender, a creditor can get around it by asking the bankruptcy court to lift the stay. For instance, if you file for a bankruptcy with no equity in your house, foreclosure creditor may ask permission from court to proceed with the foreclosure. In this situation, the court is likely to give that permission.
The fact is bankruptcy may prolong your foreclosure. But if you want to save your home from foreclosure, you need to make a deal with the Mortgage Company to repay the past due amount.
Advantage For Filing Bankruptcy To Stop Foreclosure
- Your home may be temporarily protected by an automatic stay.
Disadvantages For Filing Bankruptcy To Stop Foreclosure
- Bankruptcy will be on your record for ten years.
- Your creditor may still find a way to get around your automatic stay.
- Filing bankruptcy removes your leverage and control.
- You still need to pay back the due amount.
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