Filing a bankruptcy case will immediately stop a foreclosure sale of your home.

Many of the popular methods of staving off a foreclosure require your lender’s consent before they become effective. Short sales and mortgage modifications involve negotiating with your lender to either sell your home with no continuing loan obligation or changing the loan terms. These strategies can work, however, lenders tend to move slowly and can be arbitrary in their decision making, turning down qaulified applicants. If you have time before the sale occurs, it is worth the risk of exploring these options before considering bankruptcy.

The speed with which your lender can foreclose on your home depends in large part on whether you live in a power of sale or judicial foreclosure state. If you’re already at the end of your rope with an aggressive lender knocking at your door, is there anything you can do to stop the foreclosure? Consulting with a knowledgable attorney is a good first step. Section 362 of the Bankruptcy Code provides for Automatic Stay protection for a debtor the minute a bankruptcy case is filed. What does this mean? After a bankruptcy case is filed, the debtor is provided with a legal safe harbor that prevents creditors from contacting him or her for any reason. While a bankruptcy case is pending creditors may not call, sue, repossess, garnish or……..foreclose. Even if your home is scheduled to be sold the next day, filing a bankruptcy case will prevent the sale and freeze the status quo. A bankruptcy filing invokes the power of the federal courts on your behalf, there is no requirement that your lender agree to stop the foreclosure process, they are required by law to do so. If you find yourself behind on mortgage payments and need time to catch up, a chapter 13 bankruptcy filing will not only prevent your lender from foreclosing on your home, it will force the bank to give you time to catch up on your arrearages.

Filing a chapter 7 bankruptcy will temporarily stop a foreclosure, however, while your case is pending, your lender is likely to make a motion for relief from the automatic stay that if granted would allow for the foreclosure to proceed.  If you are facing a foreclosure, it is wise to consult with an attorney who can advise you of your rights.