Foreclosure is a problem that many people face daily. In some instances, a bankruptcy could help to save your home. Whether or not it can depends largely on if your home has already been sold:

Before the Sale

When you fall behind on your mortgage payments and receive notice that your home is facing foreclosure, you need to act quickly if you want to keep your home. Your attorney can file you for bankruptcy and stop any actions that your lender was planning to take. A bankruptcy filing results in an automatic stay to all of your creditors. 

However, the stay is limited. It expires once your bankruptcy concludes. It can also expire if your lender is able to successfully petition the court to lift it. In any event, as soon as you file for bankruptcy, reach out to your lender and start negotiating. Submit documentation to your lender to request a loan modification that could lower your payments. If the value of your home is less than what you owe, your lawyer can negotiate that you pay the actual value instead. 

If you are unable to make a loan modification and you filed a Chapter 7 bankruptcy, switch to a Chapter 13. A Chapter 13 would take all of your payments, including the arrears, and make them part of your repayment plan. As you pay according to the repayment plan, your payments are applied accordingly to your lender. You get to keep your home as a result.

After the Sale

If you did not file for bankruptcy until after the home was foreclosed on, it is very possible that your home is lost. There is an exception though. If you can prove that the lender wrongfully foreclosed on your home, you can file a petition with the court to have your foreclosure examined. For instance, if your lender did not give you proper notice that it intended to foreclose, you could argue it was a wrongful foreclosure. 

However, if you do not want your home back, you can still benefit from the bankruptcy filing. Any monies which you owe related to the mortgage can be discharged when your bankruptcy is complete. This even coves arrears or the amount left on your home after it was sold by your lender to a new buyer. 

Regardless of where in the foreclosure process you are in, it is important you talk to an attorney. He or she can help determine if there are other legal methods that apply to your case that could potentially be beneficial to you.  Need more help? Contact a professional like Michael Adler with your questions and to learn more.