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Does bankruptcy impact other court cases?

On Behalf of | Sep 4, 2021 | Bankruptcy

If you’re thinking of filing for bankruptcy, you may be interested in the impact it can have on other areas of your life. After all, this is a big decision and you need to weigh all of the ramifications carefully so that you can use bankruptcy to its full potential as a debt-relief tool. 

One thing you may be wondering is whether or not your filing will alter any other court cases that may be proceeding in your life, especially if they are financial in nature. Say, for example, that your home is being foreclosed on by the lender. This is happening because of your overwhelming debt, which is also why you’re thinking about bankruptcy in the first place, so are the two areas going to be related? 

Your foreclosure gets put on hold

In a situation like this, an automatic stay is applied to your bankruptcy case. Essentially, the court wants to handle the bankruptcy first and then come back to decide if foreclosure is still needed under your new financial circumstances. They pause the foreclosure until this is done, so you do not have to move out of your home — even though you’re not making mortgage payments. 

When you’re done with your bankruptcy filing, it may have resolved your issues by creating a new repayment plan or eliminating enough debt that you can afford your home again. If not, then the foreclosure can proceed as it was before, but you at least had a few more months to sort things out and consider your options. 

If you are interested in bankruptcy for this reason, you just need to know what steps to take. Every situation is unique, so what works well for one person might not be right for you. Learning more about how the law applies to your situation can help.


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