Can bankruptcy stop foreclosure? That’s a question many of today’s unfortunate homeowners are facing. Bankruptcy is never something anyone wants to do. It’s a terrible blemish on your credit that stays there for 10 years, and can keep you from getting additional credit or good loan rates. Yet, losing your house is an even worse option, and the prospect of it leads many homeowners to consider options that would normally never cross their minds.

So, can bankruptcy stop foreclosure? The answer is yes and no. It all depends on what kind of bankruptcy you choose. Here are your two options:

1.  Chapter 7 Bankruptcy. In this procedure, all of your assets are liquidated to pay off your debts. The court normally then absolves you of the remaining debts that couldn’t be paid. For some people with no assets, all of their debt ends up getting absolved. A Chapter 7 filing will usually put a temporary stop on foreclosure proceedings, while the case is moving through the court. This may give you some extra time to work out a payment arrangement with your loan company or to sell your home. However, once the bankruptcy case is closed, your lender can resume proceedings against you if you haven’t taken other measures to make good on your mortgage payments.

2.  Chapter 13 Bankruptcy.  If you want to stop your foreclosure through a bankruptcy filing, this is the way to do it.  A Chapter 13 is a re-organization of your debts. Your debts are often consolidated, and you make a monthly payment to the court until your obligations are paid. You can usually include your mortgage in with your other debts, which forces your lender to accept a payment plan from you. You’ll be able to make up your back payments and get back on track with your mortgage this way, and your lender can’t take your home as long as you make your payments to the court on time.

The most important thing to remember is that you need a qualified bankruptcy attorney to navigate this complicated process for you. Fortunately, you can often retain this kind of attorney for less than $500. If you’re facing the loss of your home, it’s definitely worth the money. It will take several months for your case to go through the court system, and your attorney will make sure you understand every step of the process. If you’ve wondered, “Can bankruptcy stop foreclosure?,” you now know the answer. If you’ve decided this may be a good option for you, consult an attorney in your area for more detailed legal advice regarding your particular situation, and get yourself on the road to financial recovery while keeping your home!

This is the fifth installment in our foreclosure series. Be sure to check back for updates…

In Part 1 of “How to Stop Foreclosure,” we discussed several top techniques for keeping your home, including payment plans, refinancing, renting it out, and selling it. Now, we’re going to discuss some other methods you can use to keep the bank at bay.

5.  Do a short sale. A short sale is what happens when you sell your house for less than the amount you owe on the mortgage. This type of sale is becoming more and more common as foreclosures rise. However, it requires the approval of your bank to do it. Some homeowners try to sell their homes at full price, then ask the bank to do a short sale if they get an interested buyer offering something less. This isn’t the preferred method of doing a short sale. Instead, you should get approval for a short sale first, then put the house on the market at full price, knowing you can sell it for less. You could also put the house on the market at a reduced price and advertise it as such, so potential buyers think they’re getting a bargain.

6.  Offer your bank a deed in lieu of foreclosure. Among the various methods of how to stop foreclosure, this is the least desirable, but still better than losing the house outright. It should be used as a last resort, since it damages your credit (but not as much as if you lost the house through a foreclosure sale). This method is essentially a voluntary repossession of your home. You give the deed and keys back to the bank in exchange for them writing off your loan. This allows you to walk away without owing any money, and get a fresh financial start.

7.  Hire a foreclosure specialist. While it will probably cost you several hundred dollars, the efforts of a foreclosure specialist can be well worth it. A specialist can often negotiate loan workouts with your bank where you can’t. This is because a specialist knows all the legal terminology involved in real estate transactions, and also knows what banks want. A specialist can speak to banks in their own language to get you the loan workout you need to stay in your home, or to at least put off foreclosure long enough for you to make alternate living arrangements.

If you need to learn how to stop foreclosure, it’s better to start educating yourself right away. The longer you wait to do something, the less likely the bank is to work with you. Banks want to save money and do things that will benefit their bottom lines. If the bank has already started proceedings against you, then they’ve already spent money on taking back your home. If you get to them before they spend this money, then your chances of keeping your home become much higher. So, if you’re facing foreclosure, NOW is the time to do something about it!

This is the fourth installment in our foreclosure series. Be sure to check back for updates…

If you’re looking for information on how to stop foreclosure, you’re not alone. In the month of October 2008 alone, over 300,000 foreclosures were filed in the United States. Each month, the number of foreclosures only continues to rise as unemployment skyrockets and prices on consumer goods go higher and higher.

If you’re in the position of facing the loss of your home, you’re probably desperate to find a solution. The loss of your home is one of the most devastating things a person can experience, especially if you don’t know where you’ll go next. Fortunately, there are things you can do to stop the process in its tracks. You don’t have to just sit back and lose your home. You can learn how to stop foreclosure.

Steps to Stopping the Foreclosure Process

1.  Don’t ignore letters and phone calls from your bank. This will only exacerbate the problem, as your bank will think you’re unwilling to work something out with them. The bank will be quicker to file legal paperwork against you, and will be able to show that you did nothing to try to remedy the situation. Respond to correspondence from the bank, let them know about your financial situation, and see if they’ll work with you on it. You’d be surprised at how often the bank is willing to come up with a solution for you, such as allowing you to pay back arrears in monthly installments or tacking missed payments onto the end of the mortgage.

2.  Try to refinance. Many people who are in foreclosure situations today are there because they got into adjustable rate mortgages that had low payments to begin with, but that have gone up too high to pay now. If you can refinance your mortgage at a lower rate, you’ll have a much better chance of being able to stay in your home.

3.  Rent out your house. Some homeowners choose this option if they want to keep their home, but can’t afford the payments. By temporarily moving out into a smaller place and renting out your house for enough to cover the mortgage payment, you can keep the bank at bay until your financial circumstances are on track again. However, this will only work if you can get the bank to work out a payment plan with you on any late payments.

4.  Sell your house. It may come down to either selling your house or losing it. If this is the case, selling is the better option, since that won’t damage your credit, while losing it will. If you can sell for enough money to cover your entire mortgage, then that’s the best solution. If not, then try doing a short sale, if your bank will allow it. In Part Two of “How to Stop Foreclosure,” we’ll discuss short sales and other powerful techniques for putting a stop to the bank’s efforts to take your home. You don’t want to miss it!

This is the third installment in our foreclosure series. Be sure to check back for updates…

If you’re behind on mortgage payments and see no way of catching up, you’re probably starting to wonder, “How does foreclosure work?” Tens of thousands of people just like you are looking up information on the foreclosure process every day, in fact. With thousands of people across the country losing their homes each day, this is a hot topic. You don’t have to go searching all over the web to find this information, however. You’re about to find out all about the foreclosure process, right here.

The Good News: You won’t lose your home overnight…

The first thing you should know is that you won’t lose your home overnight. This should give you some hope and maybe even a feeling of relief. Many people are afraid the bank is going to kick them out as soon as they become delinquent, leaving them homeless. This just doesn’t happen. If you’re behind on your payments, you’ll receive several late notices first, usually one a month or more for two to three months. These late notices are your opportunity to get current on your loan.

If you can’t get current and don’t contact your bank to try to work out a repayment plan for the late payments, the bank will then move to start the process of repossessing your house. You should remember that the bank doesn’t own your house, you do. However, you’ve put up the house as collateral on the loan the bank gave you to buy it. If you don’t make payments, the bank is entitled to take that collateral to cover their interests.

Because you own your house, you can sell it or pay off the mortgage in full at any point during the foreclosure process. This process differs by state, and can take anywhere from three months to a year or more, depending on state laws. After several late notices, your bank will file a lis pendens with the court in the county in which your house sits. This is an intent to foreclose. Then, the long journey through the court system begins.

If you’ve continued to not pay or work out a payment arrangement during this time, the court will eventually set a sale date for your house. The house will be sold at auction to the highest bidder, with the proceeds going to the bank.  Depending on the state, this sale may take place at the courthouse, at your actual house, or elsewhere. Once the sale is complete, you no longer own the home and must move (the date you must move will depend on when the new owner tells you to leave…..though some new owners will rent the house back to you, if you ask).  Some states provide a redemption period of several days to several weeks in which you can still pay off the mortgage and get your house back, even if it’s sold at auction, but not every state allows for this.

If you’ve been wondering, “How does foreclosure work?,” these are the basics. Of course, the full process is far more detailed and drawn out than this, but this should give you a general idea of what to expect if you’re in this situation. Because you won’t lose your home right away, this gives you a chance to either stop the process and stay, or sell the house and move. You should take advantage of the time you have to work things out, so you don’t end up like so many other people who’ve lost their homes and had nowhere to go after.

This is the second installment in our foreclosure series. Be sure to check back for updates…

Interest in foreclosure prevention is at an all-time high. That’s because the rate of foreclosures in the United States is higher than it’s been in decades. The easy credit of five years ago led hundreds of thousands of people to get into home loans they really couldn’t afford. These were adjustable rate loans, and when the rates went up, many of those borrowers found they could no longer make payments. Faced with foreclosure, many of them are now desperately trying to find ways to keep their homes. You may be one of them.

Foreclosure Prevention is Possible

The good news is that foreclosure prevention is possible, if you start right away. The most important thing to do is respond to those letters and phone calls you’re getting from your mortgage company. Too many people ignore the late notices, hoping the problem will go away. It doesn’t happen. The longer you let things go without taking action, the less likely it is that your mortgage company will work with you to come up with a plan to save your home.

When faced with losing your house, there are several things you can do. The most desirable option is to refinance your mortgage at a lower rate with more affordable payments. If your credit has been damaged, however, you may not be able to do this. You could try to work out a payment plan with your mortgage company to take care of the late payments. Usually this means you pay a little extra on each month’s payment until the arrears are paid off. If you’re already having trouble paying your mortgage, however, this probably won’t work for you, either.

What About Selling the House?

Selling the house might be a good idea, if you can find a buyer, and if you can get a price that covers what you owe on your loan. In this real estate market, that might be a tricky proposition, but not impossible, especially if you already have a lot of equity in your home and can sell it for less than it’s worth. You can also try a short sale, where the bank agrees to let you pay off the loan for less than what you owe on it.

Finally, you can see if your loan company will do a deed in lieu of foreclosure with you. In this situation, you basically do a voluntary repossession of the home, and give the keys and deed back to the bank.  Your credit will take a hit, but not as much of a hit as it would if you let the house be foreclosed upon.

As you can see, there are several ways to accomplish foreclosure prevention. Of course, this is just a basic overview, and there are many more details to using any of these methods, but this outline should give you a good idea of the options available to you when you’re faced with every homeowner’s worst nightmare. You don’t have to just sit back and let the bank take your home. You can do something about it.

This is the first installment in our foreclosure series. Be sure to check back for updates…