One of the hardest truths one can face is losing our homes to foreclosure. Many people, trying to save their homes, wonder, can bankruptcy stop a foreclosure? State laws and the type of bankruptcy will determine if a home is saved from foreclosure.

Stopping the foreclosure proceedings

Keep in mind that a mortgage turns over the property title to the mortgage company. If you do not pay your mortgage the mortgage company has the right to foreclose on the property. Filing bankruptcy will stop the immediate foreclosure process. However, to keep from losing your home you will have to work with the mortgage company to come to some type of mutual agreement to pay the debt.

Advantages of filing bankruptcy

Can bankruptcy stop a foreclosure? Yes for a brief period of time. While the bankruptcy is being processed and moved through the courts, the mortgage company cannot move to foreclose on your home. One way to stop a foreclosure is to file Chapter 13 bankruptcy. Chapter 13 bankruptcy basically reorganizes all of your debt. It does not forgive or cancel it. You are eligible for chapter 13 bankruptcy if you are employed or have regular income that is sufficient o make payments on your debt as well as cover all living expenses.

Disadvantages of filing bankruptcy

Of course, one of the primary disadvantages of filing bankruptcy is it will ruin your credit and stay on your credit report for 7 to 10 years. However, a foreclosure can cause just as much trouble for your personal credit. In some instances the mortgage company can circumvent the bankruptcy and you can lose your home to foreclosure. By filing bankruptcy you give up control of your debt and this can be detrimental to working out a deal with your mortgage company.

There is really no black or white answer to the question; can bankruptcy stop a foreclosure? It can delay it or it can temporarily circumvent the issue but foreclosure always lurks in the background when bankruptcy is declared. There are some states such as Florida that have homestead exemption and exclude the home from bankruptcy. Nevertheless, arrangements still have to be made with the mortgage company to pay off the debt.

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