Q: Can Chapter 13 bankruptcy stop foreclosure? I am afraid we about to fall behind, I just lost my job and my husband had to take 15% cut to keep his. We are considering filing Chapter 13. Everyone says that it stops foreclosure, but we want few more opinions.

A: Chapter 13 bankruptcy often called Wage Earner Plan will stop foreclosure. Majority people filing for Chapter 13, do it specifically to stop foreclosure.

Once you file for bankruptcy, your estate is protected by the Automatic Stay, which effectively bars creditors from trying to collect debts without the permission of the bankruptcy court, thus providing immediate but temporary protection against foreclosure, repossession of your car, eviction from your apartment, garnishment of your wages or bank accounts, and other punitive actions. You will have to propose a repayment plan for your debts which needs to be approved by the court.

One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income, sufficient for the repayment plan payment as well as your living expenses. So if you do decide to pursue this this option, you may have to hurry while your husband is working. There are many good sources on Chapter 13 and foreclosure topics on the web, but do consult an attorney who does bankruptcy work.