Using The Law To Make Your Life Better

What role does bankruptcy have in a foreclosure proceeding?

David Sexton

Although the national economy is lightyears better now than it was 10 years ago, there are still millions of Americans who are struggling financially, especially when it comes to debt. In fact, some people right here in Tennessee may currently be involved in a foreclosure proceeding, with their home in jeopardy. However, even for those who find themselves in these dire financial situations, there may be options, including filing for bankruptcy.

What role does bankruptcy have in a foreclosure proceeding in Tennessee? Well, as a recent article noted, there is one crucial part of a bankruptcy filing that may have an impact on such a proceeding: the "automatic stay." Our readers who are familiar with previous posts here may be familiar with this part of a bankruptcy filing, which is essentially a court order that all debt collection efforts against the filer are to "pause" in the immediate aftermath of a bankruptcy filing. As a result, a whole foreclosure proceeding can be "stayed" by a bankruptcy filing, at least for a brief time.

Will a bankruptcy filing allow Tennessee residents to keep their home from being foreclosed on? Perhaps, but perhaps not. Each person who files for bankruptcy needs to analyze the long-term financial impact of attempting to keep the home, as opposed to letting the foreclosure and bankruptcy processes proceed and allow the filer to be debt free to the greatest extent possible in the aftermath of the legal cases.

Bankruptcy can be a useful financial tool for many people in Tennessee. However, each person's financial situation is different, which is why our readers may want to get more information about their own unique circumstances and options.

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