What Does Filing for Bankruptcy Do to a Foreclosure?

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Mounting debts and the possibility of bankruptcy are not easy. There is a lot of stress, upset, fear, anger, and disappointment when you consider filing for bankruptcy. In today’s blog from Checkett, Pauly, Bay & Morgan, LLC, we talk about how filing for bankruptcy impacts the foreclosure process. 

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Automatic Stay

Filing for bankruptcy creates an automatic stay on all debt collection. Even if your mortgage lender is scheduled to take your home in 24 hours, if you file for bankruptcy the lender cannot take your home at that time.

Once you file, the court sends a notice to your creditors declaring the bankruptcy filing in court. This means no action can happen on your home until after your bankruptcy is finalized. How long does this process take? There is no specific timeline, but filing for bankruptcy may delay foreclosure on your home by a matter of months. 

How to Prepare for Foreclosure

Foreclosure isn’t the end of your finances. Filing for bankruptcy can give you a fresh start. Alleviating debt collection gives you more money to put towards the essentials, such as a car, a place to live, food, and basic bills. You can still find places to rent. Foreclosure doesn’t prevent you from applying for a lease. And you’ll have more time to put more money towards your next living situation after filing for bankruptcy.

Related Post: Chapter 7 Bankruptcy Myths Explained by Checkett, Pauly, Bay & Morgan, LLC

Chapter 7 Bankruptcy Attorneys at Checkett, Pauly, Bay & Morgan, LLC

We understand that deciding to declare bankruptcy isn’t an easy choice. The experienced Chapter 7 bankruptcy attorneys at Checkett, Pauly, Bay & Morgan, LLC, will handle your case with empathy, professionalism, and world-class service. Contact Checkett, Pauly, Bay & Morgan, LLC, or call (417) 358-4049 for more information on how we handle Chapter 7 bankruptcy.