If you get a notice that you’ve missed a mortgage payment, it doesn’t mean you’re going to immediately lose your home. It usually takes months for the default-turned-foreclosure process to play out. In fact, most lenders don’t start the foreclose process after just a single missed payment. So, there can be something of a delay between missing payments and getting an official foreclosure notice, giving homeowners time to respond.
One potential response to missed mortgage payments that cannot immediately be repaid is to declare bankruptcy. As soon as you file the foreclosure process stops.
Filing for bankruptcy stops a foreclosure, but it only serves as a temporary pause in the proceedings. This is known as an automatic stay. It is created when you file for bankruptcy, stopping other collection cases from proceeding. By filing a chapter 13 you can force the mortgage company to give you up to 5 years to catch up on the mortgage payments and save your home. The chapter 13 plan will deal with all of your debts. As part of the plan you will make your normal mortgage payments and a little each month to catch up what you are behind. When you get to the end of the plan the mortgage is current and your other debts are wiped out.
You can see that this is a fairly complicated situation, but that you do have a lot of legal options. Make sure you know what they are and how they can work for you if you’re at risk of losing your home. Contact a bankruptcy attorney to discuss your situation.