How Bankruptcy Can Help with Foreclosure

Filing for bankruptcy can be a great way to either save your house from foreclosure or at least stay in it without paying your mortgage for longer than you would be able to otherwise. It's important to understand that Chapter 7 bankruptcy will keep you in your home long-term only if you file while you are still current on your mortgage. Chapter 7 will help you avoid foreclosure by wiping out, or discharging, your other debts, in effect freeing up your income to enable you to make your house payments. Chapter 13 bankruptcy, however, can keep you in your home long-term even if you are behind on your payments.