Bankruptcy and Foreclosure: Can You Save Your Home?

Introduction

For many Maryland families, the home is their most important asset. Falling behind on mortgage payments can quickly lead to foreclosure, but bankruptcy can be a powerful tool to stop the process and give you time—or even a second chance—to keep your home.

The Automatic Stay

The moment you file bankruptcy, the court issues an automatic stay that:

• Immediately halts foreclosure proceedings.

• Stops collection calls, lawsuits, and wage garnishments.

• Forces your lender to pause and deal with the bankruptcy court first.

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This stay gives you breathing room to make a plan.

How Chapter 7 Affects Foreclosure

• Temporary relief: Filing Chapter 7 can stop foreclosure for a short time, but if you are far behind on payments, it may not permanently save your home.

• Best for walking away: If you cannot afford the mortgage, Chapter 7 allows you to discharge the debt and avoid a deficiency judgment.

How Chapter 13 Helps Save Your Home

• Catch up over time: Chapter 13 allows you to spread missed mortgage payments over a 3–5 year repayment plan.

• Ongoing payments: You must continue making current mortgage payments during the plan.

• Lien stripping: In some cases, you may be able to remove a second mortgage if the home’s value is less than the first mortgage balance.

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Other Considerations

• Maryland’s foreclosure process can move quickly. Filing early gives you more options.

• Bankruptcy may also protect other assets while you work to stabilize your finances.

Key Takeaway

• Chapter 7 = buys time or lets you walk away debt-free.

• Chapter 13 = a real chance to catch up and keep your home.

  
  

Conclusion

If you’re behind on your mortgage and worried about foreclosure, don’t wait until it’s too late. Bankruptcy may provide the relief you need to protect your home and your family’s future.

Contact Middleton Legal today for a free consultation to discuss how bankruptcy may help you stop foreclosure in Maryland.