To begin with, average home mortgage foreclosures start about four months after no payments are made.

• When any bankruptcy is filed, all debts are frozen, all collection activity stops, this gives time for the Bankruptcy Court and Trustee to review and administer the estate of the bankruptcy filer for the best interest of the creditors.
• If a Chapter 7 bankruptcy is filed before the date of the foreclosure sale, the freeze or stay on all collection activity may be easily lifted by the mortgage company, and starts the foreclosure all over again.
• If a Chapter 13 bankruptcy is filed before the date of the foreclosure sale, the freeze on collection activity depends upon the length of the plan. This Chapter 13 plan is generally three-to-five years long and it must be approved by the court.
• The initial advantage of a Chapter 13 bankruptcy is it allows the homeowner to stay in their home and not pay the entire mortgage arrearages and late fees at once, in order to stop the foreclosure sale. Also, a mathematical percentage of the remaining debt owed to other creditors may be discharged, giving the bankruptcy filer more money month to month as there is less debt to pay.
• If a Chapter 7 is filed, the homeowner must move out of the home before the end of the redemption period after the foreclosure sale—usually six months. After the redemption period expires, the property is resold. The bankruptcy filer is not responsible for any sale deficiently or unpaid property taxes as all liability for the property debts have been discharged in the Chapter 7.
• If a Chapter 13 is filed, there is no foreclosure sale or redemption period, the homeowner must catch up on all property taxes and late payments through the course of the three-to-five year plan to stay in the home.