This page is the reference matrix. For the narrative explanation of how bankruptcy and foreclosure work together, read the hub guide below.
| Factor | Bankruptcy (Chapter 7) | Bankruptcy (Chapter 13) | Foreclosure |
|---|---|---|---|
| Home Impact | May lose home; can discharge mortgage debt | Can save home via repayment plan | Lose your home |
| Credit Impact | 7-10 years | 7 years from filing | 7 years |
| Other Debts | Discharges most unsecured debt | Restructures all debts | Mortgage only; other debts remain |
| Cost | $1,000-$2,500 (attorney fees) | $3,000-$5,000 (attorney fees) | Cost of relocation + deficiency judgment |
| Future Mortgage | FHA: 2 yrs; Conv: 4 yrs after discharge | FHA: 1 yr (with court approval); Conv: 2-4 yrs | FHA: 3 yrs; Conv: 7 yrs |
A bankruptcy filing generally triggers the automatic stay, which may pause collection activity and foreclosure proceedings. It is temporary, it has statutory exceptions, repeat filings can shorten or eliminate it, and a lender can ask the court to lift it. In Chapter 13, the stay may continue while a repayment plan is being performed; in Chapter 7, the stay is typically shorter-lived. See Automatic Stay and Foreclosure for the full mechanism, limits, and exceptions.
The Key Question: Do you want to keep your home? If yes and you can afford modified payments → Chapter 13. If no or you can't afford the home even with reduced payments → Chapter 7 may be better. Chapter 7 can discharge your personal liability for the mortgage while foreclosure takes the house — a "clean break." Always consult a bankruptcy attorney — this is not a DIY decision.