Will filing bankruptcy stop foreclosure?

Bankruptcy is an effective tool in stopping foreclosure. The most important element in a bankruptcy is what is called the automatic stay. When someone files a bankruptcy, an umbrella of protection comes over them where no creditor can make a collection attempt on any of their debts. The debtor can't be sued, foreclosed, repossessed, harassed, garnished, levied, taken a judgment against, called at home, and called at work. The automatic stay completely protects the debtor from ALL collection attempts from any creditor, including foreclosure. When the debtor proposes to the court a plan of repayment, any arrearage that exists on a home would have to be dealt with in the repayment. And if that payment fails to happen then the home could be foreclosed on in bankruptcy. But yes, filing a bankruptcy stops foreclosure and puts in place a temporary restraining order against any collection attempts on that piece of property.

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