When your mortgage and other obligations are more than you can afford, you can file for bankruptcy under Chapter 7. Except for a few particular categories such as child support and tax return fees, the bankruptcy court must cancel the debts. Some of your properties can be sold by the court first to pay your creditors. Chapter seven may clear your mortgage debt, but the lien or the title of the lender in your home can not be cleared. It means that the lender still has the right to shut down, but you can use bankruptcy to avoid that.
Your lender may ask the court to refuse to stay automatically and continue foreclosure. Nolo says most borrowers conclude that the effort isn’t worth it, but that it is possible.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.