Bankruptcy can provide relief from debt and temporarily stop foreclosure, but your mortgage lender’s claim on the home still remains. ssguy/Shutterstock
Considering a bankruptcy filing takes a lot of thought and could be a concern if you have a mortgage. And although bankruptcy offers protection to homeowners, it also has rules that may affect your mortgage. This could be in the short and long term.
Besides the effect on your current mortgage, there’s the danger of not being able to apply for another one. But can you keep your house, and what are your options after declaring bankruptcy?
What Happens When You Declare Bankruptcy?
Bankruptcy helps people reorganize or eliminate some debt. Once you file bankruptcy, an automatic stay goes into effect by a federal court order. This will give you breathing room by temporarily halting collection actions, including foreclosure.
