How Can Bankruptcy Stop Foreclosure

When you become unable to make your house payments, it means that you have lost the most valuable possession that you have. In some cases, homeowners may lose their car and even their life savings when they cannot make mortgage payments. The question is, how do bankruptcy and foreclosure in NY work together. 

The problem with that is, the courts do not take kindly to those who are repeat offenders. That is why there has been an increasing trend of householders filing for personal bankruptcy to stop the process and prevent losing their properties.

For these homeowners, what they need is a plan that will allow them to save their home and possibly catch back up on their mortgage payments. The government has recently offered a program that would do just this. Known as the FHA Secure Program, it is a plan that is made available through the United States Department of Housing and Urban Development. Through this program, lenders can stop foreclosure from happening if the homeowner can prove that they are experiencing an unforeseen financial hardship.

How to Delay Foreclosure with an Automatic Stay

One of the options to consider in stopping foreclosure with an automatic stay is using your bankruptcy to set it all straight. After filling the bankruptcy, the court initiating an Order to Relief. That means you will get an automatic stay, which guarantees that your creditors will stop collecting attempts immediately. Also, it delays foreclosure sale for 3-4 months until the finish of bankruptcy proceedings.

If you need to clean other debts, you will still have to go through the foreclosure process-just below more tension and stress, and the end outcome could be a longer and more challenging one than with personal bankruptcy. The best course of action is to talk to a lawyer about your options with an automatic stay for foreclosure. Our lawyers specialize in filing for personal bankruptcy, and they can help you decide if a complete and total dismissal of your mortgage is a good option for your circumstances.

If the Lender Files a Motion to Lift the Stay

If that is allowed, you might not obtain the additional three to four weeks. But, bankruptcy generally still postpones the deal by about two weeks or longer, or more if the creditor doesn’t act quickly in submitting the motion to lift the stay.

Besides, If the lender files a motion to lift the stay, in that case, it means that there have been extenuating circumstances beyond the failure of repayment that have caused the homeowner’s inability to make payments. To determine whether or not. In that case, the lender will need to determine if there were similar situations in the past. In addition to lifting the stay, this motion can also be used to challenge the legality of the contract itself. 

For example, if the contract says that the homeowner has to pay X amount of dollars per month but failed to do so. The lender could use this motion to argue that the contract itself is illegal because it does not stipulate what must be paid. There have also been cases where the lender has used the motion to challenge the deed of trust’s legality. This agreement states that the homeowner is required to pay a certain sum of money to the trust after the loan is originated, typically a few months after the closing of the mortgage.

If the Foreclosure Notice has Already Been Filed

Many states have laws that require creditors to provide homeowners a specific quantity of notice before selling their property. A bankruptcy’s automatic stay won’t stop the clock on this progress note. If the mortgage payments have not yet been posted, then there is no grace period. At this point, it is recommended that you file Chapter 7 bankruptcy immediately and begin making the mortgage payments as soon as possible. The third mortgages are usually exempt from bankruptcy and do not have to be paid off in the foreclosure under most states’ laws.

If the foreclosure is on a property where the original mortgage originated, then filing Chapter 13 bankruptcy protection is also an option. This will allow you to sell the property and repay the outstanding debt quickly. However, you will have to submit the appropriate forms to the bankruptcy court, which may delay the sale date.

can you stop a foreclosure by filing bankruptcy

Does Chapter 13 Bankruptcy Stop Foreclosure

Chapter 13 allows debtors to repay all, or a substantial portion, of their debts in 3-5 years beneath a court-ordered plan. The most common debts discharged in a Chapter 13 bankruptcy foreclosure process are medical bills, credit card debt, and unsecured loans. If the court accepts your repayment program, creditors can’t continue collection efforts. Additionally, you should get relief from collection agencies and their barrage of phone calls and letters.

Chapter 13 isn’t what people typically think of when they think bankruptcy. It isn’t wiping the slate clean and starting all over again. Secured loans, such as alimony, child support, student loans, and taxes, must be paid in full, and obligations on matters like home and vehicle must be kept current during your repayment period. Chapter 13 is a repayment strategy that a bankruptcy court trustee administers. Ordinarily, a petitioner’s lawyer creates the plan that allows payment of substantial debts over several decades.

If you think that bankruptcy and foreclosure in NY might be the right solution for you, Сhapter 13 Bankruptcy can help you. This way, you will know what to expect from the process, and you will also be able to make the right decision. So if you asking does chapter 13 bankruptcy stops foreclosure, it will stop, but for a temporary. 

How to Use Chapter 7 Bankruptcy to Help You

If a bankruptcy case under Chapter 7 bankruptcy foreclosure (Investopedia), you file a request asking the court to discharge your debts. You are permitted to keep certain things that are considered “exempt” under the law. The property that’s not exempt is sold, and the cash from the purchase is given to lenders. Sometimes, all your property may be exempt, and there may be nothing that the creditors can receive. Individuals in such instances can still get a bankruptcy discharge.

Chapter 7 bankruptcy foreclosure after discharge does not eliminate the right of mortgage holders or auto loan creditors to take your property to cover your debt. You also need to drop below a certain income level to file for a Chapter 7 bankruptcy. This is known as the”means test” If you make a lot of money and do not pass the means test, it’s still possible to register for a Chapter 13 bankruptcy foreclosure process case.

As long as you do not have something that will make you sell your home or have a large amount of equity, you will be safe with Chapter 7 bankruptcy foreclosure after discharge. It is possible that it could put a severe strain on your budget, but you should see that it will give you the extra breathing space that you need in the long run. If you need to get out of debt, then consider getting a free counseling session from a reputable credit counseling agency. This will help you figure out how Chapter 7 bankruptcy can help you and get on with your life.

Cautionary Notes about Chapter 7

Bankruptcy and foreclosure in NY occur for various reasons, yet both have a common enemy – your lender. As the borrower under the federal bankruptcy law provisions, you cannot blame for the case filed against you by your lender. 

You Might Still Lose Your Property

All of this debt and tax liability bias is very good, but note that Chapter 7 bankruptcy foreclosure (according to Investopedia) will not prevent you from losing your property. If you enter into a mortgage, you agree to use your house as a security sort if you default on your payments.

Chapter 13 bankruptcy foreclosure process allows you to pause activity on that lien at the same time you catch up in your payments; therefore, you may save your property. Chapter 7 forgives your debt, but it won’t raise the lien and consequently won’t lift the foreclosure on your dwelling. Therefore, you can still lose your property.

You May Lose Other Valuables

Because the courts usually wish to create the creditors whole again from their loss, the bankruptcy trustee could award cash from the sale of particular other valuables of yours to the creditors. By way of example, if you’ve got a valuable wedding ring that’s worth exceeds the dollar amount you’re allowed to maintain during insolvency beneath the”jewelry exemption, so” you can lose your wedding ring.

You Might Not be Eligible

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 gives that anybody whose average gross income for your six-month period before the bankruptcy filing exceeds the state median earnings for the same household is eligible for Chapter 7 bankruptcy foreclosure in Astoria. Additionally, if your income is sufficient to pay your living costs AND finance a reasonable Chapter 13 repayment plan, you’re also eligible for Chapter 7.

The best way to avoid bankruptcy and foreclosure in NY is by not taking on more debt than you can comfortably afford to repay. Your third mortgages, second mortgages, and credit card debts must be paid off. It is not easy to cut off these revolving credit lines, but the best way is to contact your mortgage company and discuss your problem with them. The bank representative will indeed develop a solution that will help you repay the mortgage payments quickly.

How Bankruptcy Will Affect Your Credit

You must know how much you can afford to pay back your creditors and what you will be paying back. It is also a good idea to have a debtor to help you with this if you feel that you are not intelligent enough to answer this on your own.

The short answer to how bankruptcy affects your credit is that it will affect it very negatively. Mainly if you used up all of your available assets to clear your outstanding debt, you must answer this question with honesty. If you don’t, your creditors will have every right to file legal action against you and take back everything you owe them. If you do not take care of this problem, you will face even more problems in the future.

In Chapter 7, bankruptcy foreclosure after discharge, you will be able to resume building credit again, but you must use this credit responsibly. Ensure that you keep your balance low on your credit cards and pay them off as quickly as possible. Also, get yourself a good credit repair program and make sure that you follow it closely. This will help you get your credit score back up faster and build it more vital than ever.

Worst Bankruptcy And Foreclosure in NY Scenario

There is always going to be a chance of getting deeper into debt. Debt is a result of the way you handle your finances. Once you start losing the house, the chances are high that your debt will follow suit. Occasionally bankruptcy can’t stop the loss of your home. That means you might begin to believe that a bankruptcy filing is pointless. However, there are other benefits to filing for insolvency besides the interplay between bankruptcy and foreclosure in NY.

Even if you can’t keep your house, bankruptcy can help from under mortgage debts and tax liability. This is an essential first step towards getting back to your feet. Bankruptcy can also help you to put away money for the difficult times ahead.


What happens if you file for bankruptcy during foreclosure?

If you record for bankruptcy early in the foreclosure procedure, the automatic stay will briefly stop the foreclosure. As soon as you will finish bankruptcy case and the court sparks your debts, your foreclosure will continue.

Can Chapter 7 save my home from foreclosure?

Chapter 7 bankruptcy doesn’t prevent a foreclosure on your home. Once you apply for Chapter 7 bankruptcy, courtroom will dictate an automatic stay. That will put a grip over the foreclosure, whereas the bankruptcy case is currently pending.

Will Chapter 13 save my house from foreclosure?

Filling the Chapter 13 bankruptcy automatically quits the foreclosure, at least temporarily. You can pay back your delinquent payments in installments for three to five decades. But you must also make your regular monthly obligations as they come.

How long after bankruptcy and foreclosure can I buy a house?

You will have to wait three years to find a loan backed by the Federal Housing Administration (FHA) that starts if the bankruptcy and foreclosure situation ends.

Will Chapter 13 Stop Eviction?

A renter could easily stop eviction by submitting a Chapter 13 bankruptcy foreclosure process. The landlord will currently evict a renter if the landlord needed a court-ordered ruling for possession before the tenant filing for bankruptcy. The landlord, consequently, will discount the automatic stay.

Do I still own my home after Chapter 7?

Many Chapter 7 bankruptcy filers can keep a house if they’re current on their mortgage obligations. However, a borrower will likely drop the house at a Chapter 7 bankruptcy if considerable equity the trustee can pay creditors.


Valdes v. United States (2007)

By | Criminal Law

Nelson Valdes, a detective with the D.C. Metropolitan Police Department, received payments from an undercover FBI informant after running license plates and checking for outstanding warrants at the informant’s request. A jury convicted Valdes of three counts of receiving an illegal gratuity “for or because of an official act.” The D.C. Circuit, sitting en banc,…

Recent Post