Can you file for bankruptcy for your home before it forecloses?

Filing for Chapter 13 bankruptcy may prevent a foreclosure at least temporarily since a bankruptcy proceeding is given priority.  Once the homeowner files the petition, the court issues an automatic stay, which orders all lenders to cease collection activity on the home.  The petition must be filed prior to the date that the property will be sold.  The petitioner proposes a plan to make the delinquent mortgage payments.  However, if the homeowner is unable to make the payments, bankruptcy will only delay foreclosure.  Typically a home is secured by an instrument of trust.  A mortgage company may ask the court to remove the automatic stay.  The timing of the bankruptcy petition may show bad faith, if for instance, it is filed one day before the foreclosure.

Talk to an Attorney to find out what legal options you have regarding using bankrutpcy to save your home and get out from under debt.