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The Alternitive to Foreclosure or Bankruptcy 

It is not always easy to choose between bankruptcy or allowing a foreclosure. Having an either/or attitude about the decision may make the choice (already a difficult one) all the harder. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. The only way to stop this is to pay the mortgage lender.
Another type of loan, a car loan, will result in the loss of your car through repossession if you are not diligent in paying your loan. Similarly, an individual may lose their home through foreclosure if they do not keep up with the monthly payments on their mortgage.
For someone who cannot pay his or her debts, bankruptcy is a legal action they can take. The purpose of this action is to stop all the civil action against the debtor while the debtor is in bankruptcy. As a result, the mortgage lender is incapable of immediately continuing their foreclosure, or any other legal action. Still, the mortgage lender will respond by filing for relief from the stay, and once they are granted relief, the proceedings will continue. When it comes down to it, filing for bankruptcy will not prevent a foreclosure, nor will you be able to keep the home if you do not pay the mortgage lender. The best bankruptcy can do is slow down the process, but it cannot stop it entirely.
Even though it doesn't stop foreclosure, bankruptcy can also be beneficial in that it will allow a person additional time to make payments, or make it easier to pay the lender. Because bankruptcy makes a lender suspend foreclosure, a debtor will have extra time to get the money to pay the lender. The debtor may also have have several of their other debts eliminated due to bankruptcy, so they are able to have additional money available to pay their mortgage. When filing a chapter 13 bankruptcy, a court mandated payment plan permits the debtor to spread out payments over a period of time, instead of forcing them to pay all at once.
Of course, there is a good chance that a debtor might not actually be able to file for bankruptcy, as eligibility is an issue, and even if they do qualify, there are legal fees that need to be paid. As legal fees are known to be very high, a debtor can find themselves in the position of finding their legal bills more expensive than the mortgage they owe.
If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. Bankruptcy is a complicated legal process that should not be handled by yourself alone. The material offered in this article should serve only as a general guide, and for more specific information, you should contact a licensed lawyer in your state.

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