ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Can a Lender Foreclose if You've Filed Bankruptcy Recently?

Updated on February 29, 2012

Bankruptcy and foreclosure laws are both complicated and confusing, and it gets even more complicated when you are dealing with both. The effect your bankruptcy will have on foreclosure, if any, depends on the type of bankruptcy as well as the timing.

First let's talk about the timing. Going through bankruptcy only affects the debts you have at the time of the bankruptcy. If you incur more debts, such as a new mortgage, after your bankruptcy was filed, those debts are subject to the terms you agreed on when you took on the debt.

In other words, yes your mortgage holder can foreclose regardless of whether you have a past bankruptcy on your record no matter how long it has been. If it has not been long enough since your bankruptcy that you can file again, there is no way you can use bankruptcy to stop your foreclosure.

When You Can Use Bankruptcy to Stop Foreclosure

On the other hand, if it has been long enough since your bankruptcy that you can file again, you may be able to use a bankruptcy to stop foreclosure and save your home. However, you will not be able to you this tactic if your bankruptcy is recent.

If it has been long enough and you want to try to use bankruptcy to file for foreclosure, you will need to file for chapter thirteen, not chapter seven. Chapter seven can delay a foreclosure but it doesn't stop it. Chapter thirteen allows you to come up with a repayment plan that may enable you to keep your home.

You can file for bankruptcy under chapter thirteen two years from the filing date of a previous chapter thirteen filing. If your previous bankruptcy was a chapter seven, then you need to wait four years after the filing date. Your previous bankruptcy must be discharged before you can file again. Regardless of how long the case has been open, you can't have two bankruptcy cases going at the same time.

If you have a history of repeatedly filing for bankruptcy in order to stop a foreclosure or other debt collection and then having the bankruptcy dismissed once you've won yourself the time you needed, you may not be able to get a stay to get foreclosure proceedings halted during the bankruptcy process. If you had a chapter thirteen bankruptcy filing that was dismissed within the last year, the stay will only be for 30 days. If you have had two chapter thirteen cases dismissed in the past year there will be no stay at all. If the case that was dismissed was a chapter seven, you can still have the full stay when you file chapter thirteen.

Get Your Debt Under Control

Bankruptcy is meant to be a last resort for people who are drowning in debt, not a quick fix. That's why time limits apply to having your debts discharged by bankruptcy. If you find yourself needing to file for bankruptcy repeatedly for any reason other than an unavoidable and unforeseeable emergency, it's time to reevaluate your financial situation and take steps to change your spending habits.

If you are having trouble keeping up with mortgage payments, it may be possible to get a bad credit refinance to lower your payments. However, if you don't have much equity you may find that you are unable to save money on your monthly payment by refinancing.

Disclosure

I am not a lawyer; I'm just a writer. This is not intended to be construed as legal advice. If you want to discuss the specifics of your case with someone, you should contact an experienced bankruptcy lawyer.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Mari 

      5 years ago

      We filed Chapter 7 bankruptsy almost 2 yrs ago and our house is just now going into foreclosure. We are moved out and renting a home. Our lawyer told us we were responsible for the ins. coverage on the home until it was sold. The ins. has been canceled and now we cannot get anyone to give us homeowner ins. since we no longer live in the home.

    • monicamelendez profile image

      monicamelendez 

      6 years ago from Salt Lake City

      I feel really bad for those who end up in these tough situations. It seems like so often it is for health reasons and my heart goes out to all of you in this situation. Bless you all.

    • profile image

      tom 

      6 years ago

      my house under water and the septic tank is on some elses porperty very expense to hook to city and no money to do this is bankurpce the way to go

    • profile image

      Mandi 

      6 years ago

      We filed chapter 13 in 2009 and are currently still making our bankruptcy payments. We have fallen behind by almost a full 7 months on our mortgage even though we still have been paying the monthly payments when we can . We got so behind because my husband has had to have surgery and go to the doctors a lot with no health insurance. Now I just received a letter in the mail from the mortgage company about them filing a contested matter/ movant??? I am confused on what's going to happen but I'm thinking foreclosure... If so is there anyway to prevent this???

    • profile image

      Kim 

      6 years ago

      I'm looking for help and cannot afford an attorney.

      I filed bankruptcy in 2008. It was discharged in 2009. I included my mortgage and at the time I thought I was going to reaffirm on it and keep my house. Since then I lost my job and fell extremely behind on my mortgage. Now the bank is trying to foreclose. I called my lawyer from the bankruptcy and asked if the house was reaffirmed on and I guess it never was for whatever reason. So she told me legally that since the house was included the bank cannot come after me for any money owed on the house, but I'm assuming they can still foreclose on it? How does that work since it's already been included in a bankruptcy?

      I'm going to a foreclosure prevention hearing this week in hopes the bank will work w me to keep the house, but if they don't I'm afraid that will leave me w less time until they can take back the home since it's already been filed in a bankruptcy as opposed to going through the foreclosure process? In other words, how long am I looking at if they will not work with me and go forward w the foreclosure?

    • profile image

      Lee 

      7 years ago

      1st filing = 60 days automatic stay

      2nd filing = 30 days automatic stay

      3rd filing & after = 0 days automatic stay

      You need to get an extension from the judge to have the automatic stay extended. It depends on what you were trying to do and they will determine if it was good faith or not.

    • Captain Spaceman profile image

      Captain Spaceman 

      7 years ago from Manhattan Beach

      Geeze, for not being a lawyer you sure do know your stuff, Thank you for that.

    • ForeclosureDJens profile image

      ForeclosureDJens 

      7 years ago from South Carolina

      @lucy: It sounds like you Ch.7 Bankruptcy Attorney did not challenge the mortgage debt in the bankruptcy. In most Bankruptcy cases, lawyers do not, even though they should. If your mortgage debt was properly challenged as "unsecured debt" you would have had an opportunity during your bankruptcy to challenge the validity of lender and if they actually held your mortgage. It is becoming all too common over the past 10 years that the current bank or lender claiming to hold your mortgage does not actually hold it or have the right to enforce it and foreclose.

      I suggest to have a bankruptcy malpractice attorney take a look at your bankruptcy again... see if there are any obvious actions your lawyer took that they shouldn't have or things they should have brought up. I personally know a few people who have opened up their bankruptcies again because their mortgage debt was not challenged as "unsecured debt" when it should have.

      Hope that helps!

    • profile image

      Dennik 

      7 years ago

      If our house was given back to the bank as part of Chapter 7 Bankruptcy (releasing us financially from the house) does our name still remain on the deed until it is foreclosed and does that foreclosure go against our credit although Bankruptcy was discharged?

    • bethparker profile imageAUTHOR

      bethparker 

      7 years ago from Grant, MI

      @lucy, I would try to hang in there unless you are absolutely certain you won't be able to pay the payments. If you think you can keep up for another year, that gives you a year to try to find a better-paying job or find a way to make extra money in your spare time (try writing for Hubpages--works for me!). Good luck to you, whatever you decide to do. :)

    • profile image

      lucy in FL 

      7 years ago

      Thank you for getting back to me so quickly! In looking over my submission, I realize that my question is really that I can't see being able to make my mortgage payments for the long haul (maybe a year or 2 the most), and also won't see equity in it if I try to sell down the road. Would I be better off biting the bullet now since bankruptcy has already taken its toll on my credit rating? and that way be able to afford taking care of other necessities (for my daughter, etc.) Thanks for your time and consideration~!

    • bethparker profile imageAUTHOR

      bethparker 

      7 years ago from Grant, MI

      @lucy: Yes, having a foreclosure on your credit will further damage your credit rating.

      @michelle: The form you receive from the mortgage company just shows what was reported to the IRS. Talk to a tax attorney or a good accountant before you file your taxes to find out whether you have to pay taxes on the difference between the sale price and the value of the home.

    • profile image

      michelle 

      7 years ago

      i have a question we filed bankrupty last yr also our house went in to foreclosure now the loan services that gave us our mortage wants us to pay taxes on $200k can they do that, The house was worth $300k they sold it for $100 in a short sale.

    • profile image

      lucy in FL 

      7 years ago

      A year ago my home was discharged in Chapter 7 bankruptcy. The house is listed on my credit reports as included in bankruptcy, so I checked with the attorney who confirmed that I am no longer legally responsible for the mortgage but, of course, if I stop making payments the bank can foreclose. From what I've read, I am probably one of the few people who have been successful in getting a loan modification under HAMP. However, the modified amount is only approx $300 less than my original mortgage amount. My house is currently worth about $55,000 less than what I owe. I am thinking of letting it go to foreclosure as I am divorced and the only source of income. Each month I have barely enough to make the mortgage payment and other necessary bills - electric, water/sewage, auto insurance, dr bills, etc. In fact, I have to "get creative" by selling old jewelry for gold, having a garage sale, bringing clothes to consignment, borrowing from relatives,etc. to make ends meet. I'm pretty much out of other ideas along those lines. In the meanwhile, my 18-yr-old daughter is in need of a cheap but reliable car to get back & forth to school and work -- which I can't afford. I'm seriously considering letting it go. Would this have a further negative impact on my credit since my home is already reflected on my credit as part of bankruptcy?

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)