It depends on your situation and what type of bankruptcy you choose to file. Filing for bankruptcy could only delay your foreclosure, or it could help you to save your home.

If you have already received the paperwork about foreclosure, or if you are afraid you will soon, it means you are behind on your mortgage payments and the lender wants to begin the process of taking your home back in order to sell it. This can be a very slow process. The homeowner must normally miss several payments, and then the homeowner must receive notification. There are many legal hoops the lender must jump through to be able to foreclose. That delay can give the homeowner a chance to come up with the money, sell the property, or take other steps to stop the foreclosure.

In some cases, nothing will work for the homeowner, and he or she may be considering bankruptcy. The two options are filing a Chapter 7 or a Chapter 13. Both types of bankruptcy involve an order that includes an automatic stay. The automatic stay orders your creditors to stop their collection activities immediately. If your home is going through a foreclosure, the automatic stay will stop that for a period of time, typically three to four months. However, lenders can ask the permission of the bankruptcy court to proceed with the foreclosure, so you may not get the full amount of time under the automatic stay.

Chapter 7. If you choose to file a Chapter 7 bankruptcy, it normally will not allow you to keep your home. A Chapter 7 wipes away your dischargeable debts in order to give you a fresh start. Although it will get rid of many or all of your debts, it does not wipe out your mortgage debt – instead, the lenders can take the property by law. In addition, you may not be eligible for a Chapter 7 bankruptcy if your income is too high. Therefore, in most cases homeowners who need to file for bankruptcy but also want to keep their homes should consider a Chapter 13.

Chapter 13. A Chapter 13 bankruptcy will allow you to pay off your debts over a certain length of time. This may allow you to keep your home. To do a Chapter 13, you will need at least enough income to pay your current mortgage at the same time you are paying off your late payments. If you can make all the required payments, you can keep you home. You may also be able to get rid of your second or third mortgage payments under a Chapter 13, which can make it financially easier for you to stay current on your other debts.

In other words, a Chapter 7 may buy you some time, but normally will not allow you to keep your home. A Chapter 13 can allow you to stay in your home as long as certain conditions are met.

If you are facing foreclosure and you are interested in learning more about how a bankruptcy can help, call the Atlanta bankruptcy attorneys at Holston & Huntley, LLC. Call us today at 1-888-513-0004consultations are free and you are under no obligation to use our services. We serve Metro Atlanta Georgia as well as Birmingham Alabama including surrounding areas.