Both bankruptcy and foreclosure have serious consequences — but one may help you keep your home. Compare Chapter 7, Chapter 13, and foreclosure outcomes side by side.
| Factor |
Chapter 13 Reorganization |
Chapter 7 Liquidation |
Foreclosure Lender Action |
|---|---|---|---|
| Keep Your Home? |
YES Catch up over 3-5 years |
Maybe Depends on equity/exemptions |
NO Property sold at auction |
| Credit Impact |
7 years Rebuild during plan |
10 years Fresh start after discharge |
7+ years Severe & long-lasting |
| Stops Foreclosure? |
YES — Immediately Automatic stay on filing |
Temporarily Lender can lift stay |
N/A This IS foreclosure |
| Debt Discharge |
Partial Repayment plan |
Full Unsecured debts wiped |
None Deficiency possible |
| Timeline |
3-5 year plan Monthly payments |
3-6 months Quick discharge |
4-12+ months Varies by state |
| Future Home Loans |
1-2 years after discharge FHA possible sooner |
2-4 years after discharge FHA possible at 2 years |
3-7 years Hardest to overcome |