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One of the most commonly asked questions is, "Can bankruptcy stop a foreclosure?" If you're facing foreclosure, bankruptcy can become a tool to help you keep your house.
Bankruptcy
Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an automatic stay that directs your creditors to cease their collection attempts immediately, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed by law until after the bankruptcy. The bankruptcy process, including finalization, usually takes three to four months.
How do I qualify for a bankruptcy under Chapter 7?
Who is Eligible for Chapter 7- Before you can file a bankruptcy under Chapter 7 you must first pass a “means test”. If the average of your last 6 months of household income is less than the median income for your family size in New Jersey you will automatically qualify. If your income exceeds the median, it is still possible that you could pass and file for bankruptcy under Chapter 7, depending upon your particular financial situation. If you have significant assets or equity, or don’t pass the means test, Chapter 13 might be the type of bankruptcy for you.