Bankruptcy and Foreclosure: A Step-by-Step Guide
In this video, I’ll explain the process of what to do after bankruptcy Chapter 7 or Chapter 13 bankruptcy is filed to stop a foreclosure with the automatic stay. Here’s a summary of what to expect:
Facing foreclosure can be overwhelming, but bankruptcy can offer a financial lifeline. But just filing for bankruptcy isn’t enough to stop foreclosure proceedings.
Understanding How the Automatic Stay Stops Lawsuits and Foreclosures
When you file for bankruptcy, the automatic stay immediately prevents most creditors, including mortgage lenders, from taking collection actions, such as foreclosure. However, the term “automatic” can be misleading. Filing the bankruptcy petition is not enough.
Chapter 7 or Chapter 13 Bankruptcy?
Which chapter in bankruptcy is filed will affect the foreclosure. For example, with Chapter 7 bankruptcy, while it can temporarily stop foreclosure, it won’t help you save your home. If you file Chapter 7 and are behind on your mortgage, you will likely lose your home!
Chapter 13 bankruptcy will allow you to create a repayment plan (bankruptcy plan) to catch up on missed mortgage payments. The payments are stretched out between three to five years, giving you breathing room to catch up. So, Chapter 13 should be filed if you wish to keep your home.
Once you’ve filed for bankruptcy, whether Chapter 7 or Chapter 13, several steps are crucial to make sure the foreclosure is stopped. First, a “Suggestion of Bankruptcy” is filed in foreclosure court. This informs the foreclosure court that because of the bankruptcy filing, the foreclosure has to stop.
If there’s no time to file a complete petition, this video explains filing a “skeleton” or “bare-bones” bankruptcy petition.
By taking these additional steps, you can receive the full protection of the automatic stay.
If you enjoyed this video, please feel free to visit my YouTube Channel. You can visit my archives via this link. If you are a professor or instructor, you can buy my bankruptcy law textbook in bulk at a discounted price from Routledge Publishing. The textbook is available from all major retailers, including Amazon Books.
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Disclaimer: While this information can be helpful, it’s essential to consult with a bankruptcy attorney for personalized advice regarding your specific situation.
Updated on April 9, 2025.
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