Can You Do a Foreclosure on Your House After Filing for Bankruptcy?

The concepts of foreclosure and bankruptcy are usually linked, because often one will lead to the other. People who declare bankruptcy often lose their homes because they cannot afford to make the mortgage payments, among other debt obligations. And people who lose their homes often have to declare bankruptcy because they cannot make mortgage payments due to outstanding debt obligations and financial hardship.

A foreclosure and bankruptcy are not always linked, however. One can happen without the other. For example, you can foreclose on your home without having to declare a bankruptcy. Bankruptcies last for years on your record and can make it difficult to take out lines of credit if you need them for 7-10 years. (Foreclosures also stain your record, but generally are not as bad.)

You can also declare bankruptcy and still keep your home. Chapter 13 bankruptcy is reorganization bankruptcy, which – under certain circumstances and conditions – allows you to keep your home and pay off the mortgage debt and other obligations under a structured payment plan. Not everyone qualifies for a Chapter 13 bankruptcy, so consult your attorney.

Of course, if you file for a Chapter 7 bankruptcy, which is a straight liquidation bankruptcy, you will more than likely lose your home and it will go through foreclosure. Even some Chapter 13 bankruptcies face foreclosure. So, bankruptcy often does not protect a homeowner from foreclosure, and a homeowner can still face foreclosure even after bankruptcy has been filed.