Stopping Foreclosure
If you file for bankruptcy during a foreclosure case, the Bankruptcy Court's Automatic Stay immediately stops the pending foreclosure action.
In a Chapter 7 case, the injunction prohibits the bank from proceeding with the foreclosure case during the duration of the bankruptcy case, which is usually three to four months. In effect, the Chapter 7 filing temporarily halts the foreclosure proceeding for the length of time required to complete the Chapter 7 case. The bank can then resume the foreclosure case after the Chapter 7 case is concluded.
In a Chapter 13 case, the bank is prohibited from proceeding with the foreclosure case for the entire Chapter 13 commitment period, which is three to five years. In a Chapter 13 case, if the court approves the proposed Chapter 13 plan, the debtor is permitted to repay the default amount while being protected from foreclosure for the entire Chapter 13 commitment period.
If you have questions about how the foreclosure remedies available through Bankruptcy, please contact our office for a free consultation.