Will filing bankruptcy stop a foreclosure sale?

Yes, the automatic stay which becomes effective once you file bankruptcy will stop a foreclosure sale from proceeding. However, if you are seeking to keep your home, this is only the first step. Depending on your situation, chances are you will have to file a chapter 13 and either provide for full payment of the arrears (the past-due balance on the mortgage) through your chapter 13 plan or instruct the trustee to withhold arrearage payments to the lender and seek a loan modification directly through the lender. The latter will usually allow sufficient time to apply for and receive a decision on a loan modification. The Bankruptcy Court cannot require a lender to modify any loan.

Keep in mind that the stay on a foreclosure sale is temporary pending further action by the debtor in his or her case. If the purpose of the filing is to simply delay a sale, without proposing any reorganization or solution, expect the case to be dismissed within three weeks or so and the foreclosure sale to be reset. Back to back filings may further delay a sale, but the automatic stay will disappear after the second filing (see 11 U.S.C. 362[c][4]), giving the lender free reign to proceed with a foreclosure sale.