Chapter 13 can be filed 4 years from a prior Chapter 7 filing so you are eligible to file a Chapter 13 should you decide to do so. The Chapter 13 can be filed as long as the sale date for the home has not occured. This will stop the foreclosure action, and allow you to get back on your feet and payments caught up.
If the foreclosure goes through and the house is sold, the mortgage company will get what is called a "deficiency judgment" this is the difference in the amount owed on the note and what they got at the sale. This judgment can be executed and your wage or bank accounts garnished. The process is not a quick one, but it could happen at any time once they receive the deficiency judgment.
If you are still within the timeframe to file Chapter 13 before the sale of the house, you may be able to keep your home, if that is what you want. If you want to surrender the home, filing Chapter 13 will let you do this and will keep them from getting a deficiency judgment.
I think it is worth it for you in this situation to consult with a bankruptcy attorney right away!
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