Although your bankruptcy filing likely came as a welcome relief after years of struggling to make ends meet, the ongoing process has exposed you to some hard truths. Despite your best efforts, there's a good chance that you'll lose your home after your bankruptcy is discharged. There are only a few general exceptions to this rule.
In many jurisdictions, the recent foreclosure crisis has created a perennial backlog of foreclosures and short sales. Whereas mortgage companies once had little trouble wrapping up foreclosure proceedings in just a few weeks, the process takes far longer today. Depending upon where you live, you may be able to remain in your home for six months or more after your Chapter 7 bankruptcy has been finalized.
Once your bankruptcy is discharged, you will need to find another place to live. However, you may not need to leave your house immediately. While you can't track the progress of your foreclosure proceedings in real time, most jurisdictions maintain an online list of pending home auctions. Check your home county's website on a regular basis to monitor any changes in the status of your home.
In most states, local authorities are required to give homeowners at least two weeks' advance notice of an impending auction. If you haven't been checking your county's website, you'll receive an auction notice from your county's housing authority or sheriff's department informing you of the exact date of the event. As this date is non-negotiable, you should vacate the premises soon after receiving this notice. If you fail to do so, you'll be forcibly evicted on or before the auction date.
Since you're no longer under any obligation to make your monthly mortgage payments, you have a financial stake in remaining in your home for as long as possible after your bankruptcy is discharged. You'll save thousands of dollars in rent or mortgage costs by remaining where you are while the foreclosure process unfolds. Don't worry about your ongoing homeowners' association fees: They're likely to be less dear than rent on a new apartment that's big enough to hold your family.
Of course, you will eventually have to leave your home. To prepare for the next stage of your life, start saving a healthy portion of your paycheck as soon as your bankruptcy has been discharged. After a few months, you may have enough to cover the cost of next year's rent.