| Can I save my house from foreclosure? |
The filing of bankruptcy triggers the automatic stay which stops all creditors from any action to collect their claim, including foreclosure.
In Chapter 7, the stay lasts only as long as the property is not abandoned by the trustee as either valueless to the estate or as exempt, or until the case is closed. A creditor whose debt is secured by the house can seek relief from the stay to complete the foreclosure before the bankruptcy ends. Since the creditor's lien is not eliminated by the bankruptcy, Chapter 7 provides temporary relief from foreclosure, but no lasting solution.
In contrast, Chapter 13 is designed to allow debtors to cure defaults in their home mortgages by paying the arrearage over as long as 3 to 5 years. However, you cannot lower the mortgage interest rate in either chapter 7 or 13.
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