Can I Stop Foreclosure by Filing Bankruptcy in Ohio?
Many options exist to debtors in a bankruptcy case to deal with a foreclosure. Consumer bankruptcy is one option. A bankruptcy can typically stop the foreclose if the house has not yet been sold at auction or a Sheriff Sale.
Bankruptcy Options Available to a Homeowner
Chapter 13: Chapter 13 comes with an automatic stay that halts the foreclosure process. An automatic stay prevents the mortgage lender or county from going forward. Debtors can propose a Chapter 13 to maintain the ongoing mortgage payment and cure any existing defaults over a period of 36 to 60 months.
Chapter 7: Although a Chapter 7 affords the same automatic stay protection as the Chapter 13 (and can temporarily stop a home from being sold at auction or Sheriff Sale), it does not provide the Debtor with any opportunity to cure any existing defaults. As such, a mortgage lender would have the right to file a motion to lift the automatic stay and proceed with the foreclosure or may wait until the Debtor receives a discharge to continue with a foreclosure.