Foreclosure and Bankruptcy
If a debtor fails to make all required mortgage payments, the lender may file a foreclosure action. The purpose of the foreclosure action is to obtain court approval to sell the property in order to pay the defaulted mortgage loan.
Upon filing for bankruptcy, the lender must immediately stop the foreclosure process. In Chapter 7 case, the filing will temporarily stop the foreclosure action. In a Chapter 13 case, the bankruptcy filing will allow the debtor to propose a feasible plan to repay the default amount of the loan.
If you have questions about foreclosure and bankruptcy, call us for a free consultation.