How to File Bankruptcy & Foreclosure
- 1). Monitor your mortgage payments and contact your mortgage company. If you are unable to make mortgage payments or if they have gone up to unaffordable levels, contact your mortgage company first. They may be able to negotiate a lower monthly payment or other options. If you fall too far behind in your mortgage payments, the mortgage company may initiate foreclosure proceedings, meaning they will try to take back your home. You can either surrender the house to the mortgage company, or file for bankruptcy to "stay" the foreclosure.
- 2). Gather your income and asset information to file for bankruptcy. To file for bankruptcy, you will need copies of past tax returns, paystubs and creditor information (like your mortgage company, credit cards, etc.). Make a list of all of your monthly expenses including utility bills, telephones, cable, food and transportation.
- 3). Visit a bankruptcy attorney to discuss which chapter of bankruptcy would benefit you. A Chapter 7 bankruptcy will most likely liquidate your estate, and you will lose your house. A Chapter 13 bankruptcy requires that debtors have regular income to make payments to a Chapter 13 trustee over a three-to-five-year term. A bankruptcy attorney can look at the information you've gathered and tell you which type of bankruptcy you qualify to file.
- 4). File your bankruptcy petition, and plan with the bankruptcy court. An experienced bankruptcy attorney can file this paperwork for you. If you wish to proceed by yourself "pro se," you can download these forms from your court's website, and they can be filed in person at your courthouse. You must create a bankruptcy plan that tells the court how much money you will pay to creditors and when those creditors can expect payment. The bankruptcy court will look at your petition and make the final decision of whether to approve your bankruptcy plan or dismiss your case.
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