If you are facing foreclosure and cannot work out a deal or other choice with the lender, bankruptcy may help. Bankruptcy is a federal court process intended to help people reduce their debts or repay them under the protection of the bankruptcy court. When you file bankruptcy, an automatic stay goes into effect. Declaring bankruptcy might be considered the best option rather than avoiding foreclosure. Bankruptcy may be an alternative to stop foreclosure and keep your home. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately prevents all of your creditors from seeking to accumulate debts from you including your mortgage, at least until your debts are sorted out according to the law.
Chapter 7 does not permanently stop home foreclosure. Once the court grants that motion the foreclosure against your home can proceed to conclusion.
If your main debt problem is your mortgage, you may be unable to avoid foreclosure but could probably avoid declaring bankruptcy.
