Some people think: "Should I file bankruptcy or just let my mortgage lender foreclose"?
Basically, it is not an either/or decision.

A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage
payments. The only way to stop a foreclosure action is to pay the mortgage lender. A mortgage
loan is sort of like a car loan. If a person does not pay his car payment, he will lose the car
through repossession. If a person does not pay his mortgage payment, he will lose his home
through foreclosure.

Bankruptcy is a legal action filed by someone who cannot pay his debts. It stops all civil
proceedings against the debtor while the debtor is in bankruptcy. So, by law, a mortgage lender
has to suspend all legal actions including a foreclosure action. However, a mortgage lender can
file for relief from the automatic stay, and when the relief is granted, simply proceed with the
foreclosure action. The bottom line is that bankruptcy does not stop foreclosure and it does not
allow a debtor to keep a house without paying the mortgage lender. Bankruptcy only slows down
the foreclosure process.

While bankruptcy does not stop foreclosure, it can give a person time to pay a mortgage lender or
make it easier for a person to pay a mortgage lender.

Since bankruptcy requires a mortgage lender to suspend a foreclosure action, a debtor has a little
time to raise the money to pay the lender. Also, since bankruptcy can discharge some unsecured
debts, a debtor may have more money with which to pay his mortgage payments.

Also, a chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the
mortgage catch up amount over a period of time.

Unfortunately, not everyone qualifies for bankruptcy. And, if they do qualify, there are legal fees
to pay. The legal costs and fees may be more than the amount needed to catch up and make
current mortgage payments.

If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer.
Bankruptcy is so detailed that you should not try to handle it by yourself.

This article is general information. If you have any questions of any nature about avoiding
foreclosure, talk with a lawyer licensed in your state.

This article may be republished, but the wording must not be changed and the author links below must remain active.

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