Will bankruptcy stop my foreclosure in Washington?

Bankruptcy is a powerful — and often misunderstood — foreclosure tool. The key fact: the moment you file, an automatic stay halts almost all collection activity, including a scheduled trustee's sale. But what happens next depends a lot on which chapter you file.

Chapter 13: the foreclosure-stopper

Chapter 13 is designed for exactly this situation. The automatic stay stops the sale, and then your repayment plan lets you cure the past-due amount over three to five years while you keep making your regular payment. If you have steady income and want to keep the home, Chapter 13 is usually the right chapter.

Chapter 7: usually only a delay

Chapter 7 wipes out many debts but doesn't include a plan to catch up your mortgage. The automatic stay still pauses the sale temporarily, but once the case proceeds, the lender can ask to resume foreclosing. Chapter 7 can make sense if you've decided to let the home go and want a clean financial slate — but it won't save the house on its own.

The honest trade-offs

• Bankruptcy has a real, lasting credit impact — similar in magnitude to a foreclosure.
• Chapter 13 only works if you can afford the ongoing payment plus the catch-up.
• It's a legal process — you'll want a bankruptcy attorney, not a DIY approach.

If you can't realistically sustain the payment, selling before the sale often protects your credit and equity better than bankruptcy. We can help you compare — see selling before foreclosure — at no cost.

This article is general information for Washington homeowners, not legal or financial advice. For free help, call the Washington Homeownership Hotline at 1-877-894-HOME or a HUD counselor at 1-800-569-4287.