Part 2

To dive right into the heart of the matter, yes, bankruptcy can stop foreclosure, thanks to a provision in the United States Bankruptcy Code known as the “automatic stay.” An automatic stay is like a protective shield, halting most collection activities by your creditors, including foreclosure.

When you file for bankruptcy, the stay is issued, buying you time. It pauses the collection process, including foreclosure, giving you the opportunity to assess your situation, catch your breath, and prepare your next steps. However, it’s vital to remember, this pause is temporary. Your lender can file a motion for relief from the automatic stay. If granted, they can proceed with the foreclosure.