Foreclosure is one of the most distressing situations a Pennsylvania homeowner can experience. When you're behind on mortgage payments and facing the threat of losing your home, it may feel like there's no way out. However, bankruptcy can provide a legal shield—at least temporarily—against foreclosure proceedings.

In this blog, we'll explain how bankruptcy affects foreclosure in Pennsylvania and how filing under Chapter 7 or Chapter 13 can help you stay in your home.

The Automatic Stay: A Temporary Barrier Against Foreclosure

When a homeowner files for bankruptcy in Pennsylvania, an automatic stay immediately goes into effect. This is a court order that stops most collection actions by creditors—including foreclosure—while your bankruptcy case is active. This stay gives you time to evaluate your options and potentially save your home.

Key benefits of the automatic stay:

• Halts foreclosure proceedings
• Stops wage garnishments
• Prevents creditor harassment

However, it’s important to note that this protection is temporary. The lender can request to lift the stay, especially if you have missed multiple payments.

Chapter 7 Bankruptcy: A Brief Delay

Filing for Chapter 7 can temporarily stop foreclosure, but it does not provide a long-term solution unless you are prepared to catch up on missed payments or negotiate with the lender. Chapter 7 is typically used to eliminate unsecured debts, but it does not provide a repayment plan for mortgage arrears.

Result: You may delay foreclosure but not necessarily avoid it unless your lender agrees to modify the loan or you can refinance.

Chapter 13 Bankruptcy: A Path to Keep Your Home

Chapter 13 bankruptcy is often more effective for homeowners trying to prevent foreclosure. It allows you to:

• Propose a 3- to 5-year repayment plan to catch up on missed mortgage payments
• Keep your home while continuing to make your current payments
• Potentially reduce or eliminate other debts, making your mortgage more affordable

This chapter is especially helpful if you have a steady income but have fallen behind due to temporary financial hardship.

Pennsylvania-Specific Considerations

In Pennsylvania, lenders must go through the judicial foreclosure process, which means they must file a lawsuit in court before selling your home. This process gives you a window of opportunity to act—either by defending the foreclosure or filing for bankruptcy before the sale is finalized.

Legal Guidance in Scranton

Every situation is unique, and bankruptcy laws can be complex. At Tullio DeLuca Attorney, we guide Scranton residents through their legal options to help avoid foreclosure and regain financial control. Whether Chapter 7 or Chapter 13 is right for you depends on your income, the amount you owe, and your long-term goals.

Conclusion

Bankruptcy can be a powerful tool to stop or delay foreclosure in Pennsylvania, especially when used strategically. The key is acting early—before your home is sold at auction.