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Contest the Foreclosure

You can fight a foreclosure whether or not you file for bankruptcy. But if you file for Chapter 13 bankruptcy, you can ask the bankruptcy court to decide whether the facts upon which a proposed foreclosure is based are erroneous.

For example, suppose you contest the foreclosure on the ground that your mortgage servicer failed to properly credit your payments. A court decision in your favor on this point would eliminate the basis for the foreclosure should you later drop your Chapter 13 case or convert it to a Chapter 7 bankruptcy. (Remember, you aren’t confronted with the foreclosure itself while you are in Chapter 13 bankruptcy unless the lender seeks and gets court permission to lift the stay.) Unlike some state courts, the bankruptcy court is a comparatively friendly forum for homeowners challenging foreclosures. (See Ch. 7 for more on the grounds for contesting a foreclosure.)