Does Bankruptcy Stop Foreclosure Even After the Bank Sues You?

What do you want of Home Loans After Bankruptcy ?.

Although many homeowners think bankruptcy as one of the last options to avoid losing a property, many seem unclear on just how late they can wait to file, and how it will work on the foreclosure lawsuit. They may believe that, since the bank has already sued for foreclosure, filing bankruptcy might not have the desired corollary of ending that lawsuit. However, it is still inherent to file and seek safety of the courts even late into the process of losing the house.

Homeowners who have recently been foreclosed on can still file bankruptcy to avoid losing their homes even though the bank is pursuing foreclosure in the local courts. Just because the lender has initiated a lawsuit to take the house back does not mean that homeowners are unable to seek safety straight through the federal bankruptcy court system. In fact, it is actually these types of range efforts that the bankruptcy laws were set up to protect borrowers against.

Home Loans After Bankruptcy

Essentially, foreclosure proceedings are a range attempt by mortgage companies to force homeowners to pay what they owe on the loan, or have their home auctioned off by the county government to satisfy the mortgage if there is no other way to pay the debt. There is nothing else secretive or fancy about the process, and it is dinky dissimilar from a credit card business or other creditor suing borrowers to force cost of a debt. The main inequity is that the mortgage debt is secured by the property, so the bank has more of an quality to force the sale of the house.

Thus, homeowners are almost always able to file bankruptcy to stop foreclosure up until the time that they are no longer the owners of the home. This typically means that they can wait until just a few hours before the scheduled sheriff sale of the asset to file the bankruptcy petition, and this will stop the foreclosure process from being able to continue. Of course, it is good to file before the very last minute, but sometimes homeowners are working on other clarification that falls straight through and need to file an emergency bankruptcy.

Once a borrower files a petition with the bankruptcy courts, the self-acting stay goes into effect, which precludes lenders from being able to continue range efforts. Because the entire foreclosure lawsuit is a range effort, the mortgage business will have to put its process on hold until the debt is resolved straight through bankruptcy, whether straight through the cost plan or a dismissal. As can be expected, most lenders do not particularly want to deal with the extra hassle this causes, but they have no other selection than to put the foreclosure on hold.

So homeowners who are facing a foreclosure or have already been sued by the lender will be able to file bankruptcy and consist of the house in the petition anytime until the sheriff sale. After the auction, when proprietary is transferred into the name of the new owner, then it will be too late to rely on this selection to stop foreclosure, because the borrowers no longer have an proprietary interest in the property. But as long as they do have title to the property, they can seek safety in bankruptcy court against the bank's range efforts.

Although bankruptcy is regularly considered to be dinky good than losing the home outright, owners may wish to keep the idea of filing as a last ditch attempt if they need more time to stop foreclosure. Bankruptcy can always be used in self-defense just to buy more time, while homeowners fight for other solutions or defend themselves against the lawsuit. Unless they no longer own the house at all, it is inherent for borrowers to file bankruptcy even if they are being sued by the lender for foreclosure.

Does Bankruptcy Stop Foreclosure Even After the Bank Sues You?