“I didn’t know what else to do. Filing bankruptcy seemed like my only option.”
That’s what Terry, a homeowner in Texas, said when he contacted us just 5 days before his foreclosure auction. His loan was 9 months behind, his lender wasn’t returning calls, and time had run out. The only thing his attorney suggested to stop the sale was filing for Chapter 13 bankruptcy.
And while bankruptcy does pause the foreclosure, it can be a devastating long-term decision.
Why Last-Minute Action Can Box You In
Many homeowners wait until the final week—or even the last 24 hours—before trying to stop a foreclosure. When time is gone, traditional solutions like refinancing or selling become nearly impossible. That’s when bankruptcy gets thrown on the table.
But here’s the truth most people don’t hear until it’s too late:
- Chapter 13 doesn’t eliminate debt. It restructures what you owe and adds court fees.
- Most repayment plans fail. Over 60% of homeowners who file for Chapter 13 fall behind again and get foreclosed anyway.
- Credit is destroyed. You’ll have a bankruptcy on your credit for up to 10 years—making it hard to rent, finance, or even get certain jobs.
- You still lose your home in many cases. But now you’re also buried in legal fees and paperwork.
Bankruptcy Should Be a Last Resort—Not a Strategy
There are cases where bankruptcy makes sense—especially if you have multiple debts and need court protection. But filing just to stall a foreclosure is like using a tourniquet on a wound that needs stitches: it might slow the bleeding, but it doesn’t fix the problem.
And there’s often a better way:
Selling your home for cash—before the auction—can provide:
- Enough money to pay off the mortgage
- Extra funds in your pocket
- A clean exit without court filings
- No long-term credit damage
Don’t Wait Until You’re Out of Options
We’ve seen dozens of families who waited until the very last minute, and nearly all of them say the same thing afterward:
“I wish I had started this process sooner.”
If you’re facing foreclosure and the clock is ticking, don’t panic—but don’t delay either. A simple 15-minute conversation can give you a real strategy—and potentially save you from years of financial setbacks.