The threat of foreclosure is one of the most frightening things for a homeowner. Do you need information on how bankruptcy can stop foreclosures? When you fall behind on your mortgage payments, your lender has the right to foreclose on the property. Foreclosure is the legal proceeding whereby your mortgage lender sells your real property. The lender then applies the money from the sale of the property toward the debt owed on it.
How Bankruptcy Can Stop Foreclosures
As soon as you file for bankruptcy any pending foreclosure action must stop. This is because of the Automatic Stay, which is a provision of the U.S. Bankruptcy code that mandates all collection activity against a debtor stop.
Bankruptcy will at least temporarily stop foreclosure, but to save your home you will have to get current on your mortgage payments. Also, to prevent foreclosure you must make your monthly mortgage payment during and after bankruptcy.