Filing Bankruptcy and the Automatic Stay: A Method for Keeping the Dragons at Bay?

For a financially overwhelmed debtor, filing a chapter 13 or chapter 7 bankruptcy petition can keep creditors at bay. Once the individual files the petition an automatic stay is ordered and becomes effective immediately upon the filing of the petition. The stay prevents all of the debtor's creditors from continuing to seek repayments on their debts until the bankruptcy proceedings are concluded. To many people in bankruptcy situations, the automatic stay provides a saving grace and permits their lives to return to some semblance of normalcy until the conclusion of the proceedings when their financial situation has been improved by the bankruptcy. In addition, once a person files for either chapter 13 or chapter 7 bankruptcy, any and all lawsuits with regards to the debtor's debts are stalled and creditors cannot seek wage garnishments from the debtor. If the debtor files for bankruptcy after creditors were awarded wage garnishment, these garnishments immediately stop and any funds that were taken from the debtor he or she has filed the bankruptcy petition must be refunded to the bankruptcy estate. Further, once a bankruptcy petition has been filed, creditors cannot communicate or attempt to contact a debtor by phone, letters, or most other means of communication. This usually comes as a huge relief to debtors who typically find that they are inundated with constant phone calls and letter correspondence from creditors seeking repayments of debts. The following are just some of the other creditor actions that must stop when a person files for bankruptcy: applications for liens against property, mortgage foreclosures, termination of utility services such as electricity and phone, tax foreclosures, repossession of property, and eviction proceedings - just to name a few. Bankruptcy laws are very complicated, therefore it is strongly advised that debtors seek out the advice of an experienced bankruptcy attorney to assist him or her with bankruptcy matters. For more information regarding Chapter 13 bankruptcy, Chapter 7 bankruptcy, foreclosure or other consumer debt issues in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Avoiding A Foreclosure Sale With Bankruptcy

Bankruptcy offers an automatic stay which can assist a home owner in advance of a foreclosure and sheriff's sale. The Chapter 13 filer and the Chapter 7 filer can both obtain foreclosure relief in this manner. The debtor must be aware of when a filing will help and should not wait until the sheriff's sale to take advantage of this protection. When the debtor in US Bank National Association v. Rodriguez attempted to utilize bankruptcy after the fact to avoid a sheriff's sale the judge ruled that the time for Defendant to act had long expired and debtor's lack of action until the 11th hour would not be permitted to work and injustice against the bank. The debtor failed to enter the foreclosure action, in spite of proper notice from the bank, and a default judgment in foreclosure was entered in 2009. Only upon learning the sheriff's sale was looming did the debtor act but the only action taken was to utilize all adjournments of the sheriff's sale available by law and attempt to induce the bank to modify the loan. Finally, after the sheriff's sale took place, the debtor filed bankruptcy in an effort to vacate the sheriff's sale. An automatic stay will not permit you to stay in your home forever or strip the mortgage from a primary residence but it will give you the breathing room you need to review the different options available to you as a bankruptcy filer. If you are facing foreclosure you should consult with an experienced consumer debt protection attorney immediately in order to protect your rights. For more information regarding foreclosure, bankruptcy or other consumer debt matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief.

Bankruptcy and Foreclosure

If your bank has threatened you with foreclosure or has already begun the process of foreclosing on your home, bankruptcy could provide you with an opportunity to save your home. Upon filing your petition for bankruptcy, you will receive what the courts call an “automatic stay”. This means that creditors will not be able to contact you, attempt to collect any debt you owe them and will stop foreclosure efforts against your home. However, banks usually file a motion to lift the automatic stay and seek to proceed with the foreclosure, but it will take some time before a judge grants their motion. If you have multiple mortgages and are seeking to save your home, you should consider filing for Chapter 13 bankruptcy which could allow you to remove your second and third mortgages. This will occur if the value of your home is worth less than what you owe on your first mortgage. You will still be liable to the bank holding your first mortgage, but by stripping off your second and third mortgage, you could substantially reduce your monthly payments, leaving you with the extra cash necessary to save your home. If you are considering filing for bankruptcy you will be addressing many issues concerning foreclosure and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding consumer debt, bankruptcy and foreclosure or other bankruptcy law matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. We are a Debt Relief Agency. We help people file for bankruptcy relief.