Many who qualify to file
Chapter 7 bankruptcy may do so due to
foreclosure proceedings against their home. The filing process helps stop proceedings
from moving forward and it may give you more time to plan your next move
and explore options. Some may wonder if the filing process will have an
effect on the sale of a home, especially if a date has yet to be determined.
This is often a concern for those who file just days prior to the sale
While the process may vary depending on the state you live in, for most
people they experience similar actions depending on how far their foreclosure
has progressed before they filed for protection. Many filers have between
6 weeks and 3 months of extra time to stay in their home when the automatic
stay goes into effect when the bankruptcy petition is filed. With the
stay in affect the lender will stop or postpone foreclosure proceedings
until they learn from the court the stay has been removed.
What happens next may depend on whether you want to keep your home. Filing
may give you additional time to reach an agreement with the lender. The
lender, on the other hand, may be able to help you relocate if you decide
not to stay in the home. Some offer relocation assistance depending on
qualifications. While filing bankruptcy can help in discharging unsecured
debt, few file since it may give the extra time needed to make a rational
decision about their home without the added pressure from the lender.