Many of our clients in Monterey, Salinas, Santa Cruz and Santa Clara ask us that question.  The answer has many parts, depending on each client’s situation.  As a general matter, the filing of a bankruptcy case automatically stops the foreclosure prcoess.  The lender cannot proceed any further until they obtain permission from the bankruptcy court or the case is completed.  While the foreclosure is stopped, a homeowner also an opportunity to modify their loan if they want or pursue some other remedy, such as a short sale or deed in lieu of foreclosure.  A homeowner can also eliminate a second mortgage or HELOC if the house is worth less than the balacne of the first mortgage.  If nothing else, the filing of the bankruptcy case provides a homeowner with additional time to stay in their home without paying for the mortgage.

For more information, check out our website at www.AlliottsLaw.com or call our offices at 831 753 2200.