I live in a rental house that is being foreclosed, but my landlady said she was filing for bankrupcy to stop the foreclosure,and I shouldn't worry. Can bankrupcy stop the foreclosure? ...

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Question: 

I live in a rental house that is being foreclosed, but my landlady said she was filing for bankrupcy to stop the foreclosure,and I shouldn't worry. Can bankrupcy stop the foreclosure?

Selected Answer: 

 Yes, in some cases

 Yes, in some cases bankruptcy can stop the foreclosure process. Upon filing for bankruptcy, the automatic stay goes into effect, which essentially stops creditors from pursuing collection actions against the filer. If the home is scheduled to be sold in a foreclosure sale, filing for bankruptcy may postpone the sale until the bankruptcy case is complete, usually in three to four months. However, the lender may be able to file a motion with the bankruptcy court asking the court to lift the automatic stay and allow the sale to go forward. If the motion is granted, the sale may only be postponed by a couple of months. Your landlord may be able to prevent a foreclosure completely by filing for Chapter 13 bankruptcy and catching up on missed payments. However, you should continue to talk with your landlord regarding the status of your rental home and be aware that you may need to find a new place to live at short notice.  For more information about Chapter 13 bankruptcy see http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx

All Comments

 Yes, in some cases

 Yes, in some cases bankruptcy can stop the foreclosure process. Upon filing for bankruptcy, the automatic stay goes into effect, which essentially stops creditors from pursuing collection actions against the filer. If the home is scheduled to be sold in a foreclosure sale, filing for bankruptcy may postpone the sale until the bankruptcy case is complete, usually in three to four months. However, the lender may be able to file a motion with the bankruptcy court asking the court to lift the automatic stay and allow the sale to go forward. If the motion is granted, the sale may only be postponed by a couple of months. Your landlord may be able to prevent a foreclosure completely by filing for Chapter 13 bankruptcy and catching up on missed payments. However, you should continue to talk with your landlord regarding the status of your rental home and be aware that you may need to find a new place to live at short notice.  For more information about Chapter 13 bankruptcy see http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx