Automatic Stay

• As soon as you file for bankruptcy, the court will place an automatic stay order. This order halts any collection activity by creditors or debt collection services. If your home is not in foreclosure at the time you file for bankruptcy protection, the automatic stay gives you time to work with the court and your creditors to determine the best way to save your home. The mortgage company does have the legal right to ask the court lift the stay and allow it to proceed with a foreclosure.
  
  

Chapter 13

• Filing for a Chapter 13 bankruptcy gives you the opportunity to work with your lender through the bankruptcy court and remain in your home. Any payments that you have missed can be included in the scheduled payments to the trustee. You will have to continue making your regular payments as scheduled but the amount of your housing payment will be considered with your other expenses when the trustee is setting your repayment plan.
  
  

Chapter 7

• If your mortgage payments are current and you do not have enough equity in your home for your state's bankruptcy requirements, you may be able to keep your home. You must continue to make the scheduled payment during the bankruptcy proceedings. You may have to reaffirm the debt with the lender in order to be able to stay in your home.
  
  

Consequences

• Declaring bankruptcy does not automatically mean that you will lose your home if it has not been foreclosed on but it also does not mean that you will get to keep your home. Preventing foreclosure or losing your home through bankruptcy requires that you have the ability to make your payments. Refinancing your home will be difficult after declaring bankruptcy so if you are not able to make your payments after bankruptcy, you could still face foreclosure.