Can Bankruptcy Help Me Avoid Foreclosure in Texas?

 Posted on January 07, 2025 in Foreclosure

Bankruptcy can sometimes help stop or delay foreclosure in Texas, but it is not a one-size-fits-all solution. It depends on how far the foreclosure has progressed and which type of bankruptcy you qualify for. In a 2025 ATTOM housing report, Texas ranked among the states with the highest numbers of foreclosure filings, showing that many local homeowners are still struggling to keep their homes.

As of 2026, lenders in Texas can move quickly once a homeowner falls behind. Bankruptcy does not erase every mortgage problem, but it can slow things down. If you are worried about losing your home, speaking early with a Parker County, TX bankruptcy lawyer at Acker Warren P.C. is the first step to knowing whether bankruptcy could give you time or options.

How Does Bankruptcy Stop a Foreclosure Sale in Texas?

When you file for bankruptcy, the law creates something called an automatic stay. This is a court order that immediately pauses most collection activity, including foreclosure sales.

Under 11 U.S.C. § 362, lenders must stop foreclosure actions as soon as a bankruptcy case is filed in most cases. This can halt a scheduled foreclosure sale and give you time to assess your next steps. However, the automatic stay does not cancel your mortgage. It can just temporarily protect your home while the case is active.

Which Type of Bankruptcy Is Used To Stop Foreclosure?

The two most common bankruptcy options for homeowners are Chapter 7 and Chapter 13. Each affects foreclosure differently.

Chapter 7 may delay foreclosure for a short time, but it usually does not provide a way to catch up on missed payments. Chapter 13 is more commonly used by homeowners who want to keep their home and resolve arrears over time.

How Can Chapter 13 Bankruptcy Help Me Keep My Home?

Chapter 13 bankruptcy allows you to propose a repayment plan that lasts three to five years. This plan can include past-due mortgage payments, giving you time to catch up while staying in your home.

Under 11 U.S.C. § 1322, a Chapter 13 plan may allow you to cure mortgage arrears and continue making regular payments going forward. This option is often used following temporary financial setbacks, such as job loss, illness, or unexpected expenses.

What Situations Make Bankruptcy More Likely To Help With Foreclosure?

Bankruptcy works best in foreclosure cases where the homeowner can afford future payments but needs time to recover from past problems.

Common situations where bankruptcy may help include:

• Temporary income loss that has since improved

• Falling behind due to medical bills or emergencies

• Needing time to sell the home instead of losing it to foreclosure

• Wanting to stop a foreclosure sale while exploring other options

Our experienced attorney can review your finances and explain whether these factors apply to your situation.

Does Bankruptcy Eliminate My Mortgage Debt in Texas?

Bankruptcy does not automatically erase a mortgage. The lender’s lien on the home usually remains in place.

In a Chapter 13 case, you keep making regular mortgage payments while paying missed amounts through the court-approved plan. If payments are missed again, the lender may ask the court for permission to resume foreclosure.

Are There Times When Bankruptcy Will Not Stop Foreclosure?

Bankruptcy does not help in every situation, especially if the home is no longer affordable or the foreclosure sale has already occurred. Bankruptcy cases also come with strict requirements. Under 11 U.S.C. § 521, you must provide full financial disclosures and required documents. If deadlines are missed or payments are not made, the case can be dismissed, allowing foreclosure to continue.

What Should I Do if Foreclosure Has Already Started Before I File for Bankruptcy?

Filing for bankruptcy before the foreclosure sale takes place is critical. Once the sale happens, your options become very limited.

If foreclosure has started, the following steps taken quickly may help:

• Confirm the foreclosure sale date.

• Gather mortgage and payment records.

• Review income and expenses honestly.

• Speak with a bankruptcy lawyer as soon as possible.

Early action often provides more options and less stress.

Schedule a Free Consultation With Our Fort Worth, TX Bankruptcy Attorney

If foreclosure is putting your home at risk, a Parker County, TX bankruptcy lawyer at Acker Warren P.C. can help you understand your options. You will always speak directly with an attorney, not a paralegal. Our firm can handle cases completely virtually and offers an extremely fast turnaround when time matters.

Call 817-752-9033 to schedule your free consultation, and let us help you protect your home.