How long will a chapter 7 bankruptcy delay a foreclosure?

A Chapter 7 bankruptcy may not delay foreclosure proceedings for very long. Although an “automatic stay” goes into effect when bankruptcy is filed, preventing further lawsuits from going forward without permission from the bankruptcy court, a bank with a mortgage security interest has the right to go to bankruptcy court and file a motion for relief from the automatic stay, which will be granted in a Chapter 7 bankruptcy. That means that the bank will be allowed to go forward with its foreclosure litigation. This motion process may delay the foreclosure by 30 days, possibly by 60, but not for much longer. The best way to protect your property from foreclosure through bankruptcy court is to file a Chapter 13 “reorganization” bankruptcy, in which a plan will be devised allowing you to pay off your debts over a period of time. The Chapter 13 proceeding may even reduce your debts, and it will control the amount of interest and late fees that accrue on loans.