In a typical bankruptcy proceeding, an order is issued to stop all collection efforts and any foreclosure proceedings. Throughout the bankruptcy process, your mortgage lender will not be able to pursue foreclosure and must work with the bankruptcy court regarding your mortgage debt. However, if your bankruptcy case is dismissed, your house may not be protected further.
Will I Lose My House?
After a bankruptcy dismissal, you return to the same financial position as before filing. In other words, if you were behind on your mortgage payments but your lender did not initiate the foreclosure process; your house is at no greater risk of foreclosure than before you filed for bankruptcy. However, your lender may resume collection attempts and could begin the foreclosure process at this point if they saw fit. Contact your lender to negotiate a repayment arrangement before they begin the foreclosure process.
If your house was in the foreclosure process before you filed for bankruptcy, your lender is free to resume foreclosure activity again if your bankruptcy case is dismissed. However, your lender does maintain the right to stop a foreclosure proceeding if they feel you will be able to repay the missed payments and get caught up on your mortgage. The lender does not like a foreclosure any more than the borrower, as they tend to lose more money in a foreclosure than if they agree to a mortgage loan modification. If you can afford to repay your missed mortgage payments, contact your lender right away to request a mortgage modification and stop the foreclosure process. If you cannot afford to repay your missed mortgage payments, contact a bankruptcy attorney to find out how to get your case reinstated.