Many people who are in foreclosure consider bankruptcy. However, whether bankruptcy is the right choice for you or not depends on many complex factors. With all the moving parts, it makes sense to discuss the issue with an attorney. How complex is it?
Since most people come to me when they are facing foreclosure, or otherwise engaged in an active dispute with their lender, we can focus on a foreclosure related issue. If your house is in foreclosure, and you owe more on the mortgage than the house is worth, and you have no other debts, selling your house in what is called a "short sale" may make more sense. A lender with a "first mortgage" on a mortgagor's home can often escape the bankruptcy process through what is called a "motion for relief from stay."* Fighting the motion, and the cost of filing and representation in bankruptcy may be too expensive to make a bankruptcy filing sensible.
That does not mean, however, that you should sell your house without an attorney if your or at or near a foreclosure proceeding. Banks can be very tricky to deal with late in the foreclosure game.
*A mortgagor is an individual who gives a mortgage; a bank or any other person securing a financial obligation by way of a mortgage is a mortgagee.
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