Can bankruptcy stop my foreclosure?




Will filing bankruptcy stop a foreclosure?

When you file bankruptcy, all debt collection efforts end...temporarily. That means a pending foreclosure sale date will be cancelled, and you may get a few months of relief. However, once your bankruptcy is discharged, you will be right back in foreclosure again.
bankruptcy to stop foreclosure

What happens to my house in bankruptcy?

Many tout bankruptcy as an answer to a foreclosure. This is simply not accurate. Bankruptcy is a solution to debt issues. Filing bankruptcy will not in fact help you keep your home, nor will it end the lenders collection efforts, but it will halt them temporarily during the bankruptcy proceedings.

foreclosure sign

Bankruptcy will buy you a little bit of time.

Your foreclosure won't move forward during the bankruptcy, and a successfully discharged bankruptcy will remove your personal responsibility to this debt. However, the lien against your property remains, so you will inevitably have to repay the amounts owed, modify the loan, pursue a short sale, or your home will end up in foreclosure anyway. Even once your bankruptcy is discharged, you will still own the property and the lender will have to continue the foreclose process in order to gain title to the property.

top 5 benefits of a short sale vs foreclosure

How do I get rid of the home and avoid foreclosure?

After bankruptcy, you will still remain the legal owner of the home until you sell it or it forecloses. Foreclosure in Florida can take years. I have many clients who file for bankruptcy, who wish to also avoid the additional ramifications of foreclosure. These clients generally choose to sell or short sell their homes after bankruptcy, in order  to minimize the damages and recover faster. 

Benefits of a short sale vs. foreclosure after a bankruptcy

  • Short sales take a few months, while foreclosure can take years. Hasten your recovery time from your bankruptcy by short selling your Jacksonville home.
  • In a short sale, you control the timeline and your moving times. In a foreclosure your lender gets possession of the property on their terms, and then evicts you and your family. 
  • Even though missed mortgage payments will no longer be reported to your credit report after bankruptcy, when you attempt to buy another home, a new lender will need documentation of how your property was disposed after bankruptcy. Your foreclosure date will set the seasoning times for your new loan, not your bankruptcy date. The difference could be several years.
  • You may even qualify for relocation assistance in a short sale.
Bankruptcy is a solution for overwhelming debts, but not always the best solution to mortgage debt. Over 99% of all our short sale approvals are for full mortgage debt forgiveness, making a short sale an ideal solution for over-leveraged homes. Short sales are common following a bankruptcy discharge, as home ownership issues are not fully resolved in bankruptcy. 

I was at my wits end. I saw an ad online about Minna and short sales so I decided to take a chance. I am so glad I did!!! From the beginning, Minna was on top of things. I didn't have to do anything which was good because I had no idea what I was suppose to do or not do as this was the first time selling a house (along with my first short sale). I asked a lot of questions and Minna always responded immediately and professionally, even when the questions were kinda crazy. The bank was the cause for losing 2 of our potential buyers but Minna and her crew had another buyer on the line immediately, everytime, because the house was always being shown. We finally got the last buyer and Minna and her wonderful crew pushed almost everyday to keep the bank on their toes which enabled us to actually close on the house!!! Selling this house has allowed us to be able to go on with our lives and we owe this all to Minna and her crew. Thank you so much! I don't know what I would have done without you at my side.


Last Updated on January 31, 2023 by Minna Reid


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