Once your home goes into foreclosure, you need to work diligently to save it. Otherwise, the lender will sell it to someone else. After all, the lender’s main goal is to get money for the property. They are not in the business of collecting homes.
The foreclosure process is rather lengthy. You have multiple chances to stop it and fix your loan situation. Still, if you cannot do that, you may wonder when the right time is to file for bankruptcy and save your home.
File when your home goes up for sale
Much of the foreclosure process will focus on your lender trying to work with you to solve the problem. You will have the chance to discuss your options with the lender, usually through mediation. However, if you financially cannot save your home by bringing your mortgage up to date or reaching an agreement with your lender, your lender has the right to put your home up for sale. It is at that time you should file for bankruptcy.
Make sure you file on time
Filing bankruptcy does not really happen overnight. You will need some time to get your paperwork in order. You may also need to save money to pay for the process, which also can take some time. Plan ahead because once you go through mediation with your lender, it can put your house up for sale in 15 days. If you do not go through mediation, the sale can happen 45 days after you get the Order to Docket, or if you receive a final loss mitigation affidavit after the Order to Docket, it can happen in 30 days.
Bankruptcy may not be the best option in all situations. Make sure you understand what your choices are for saving your home first.