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You’ve probably heard a lot about bankruptcy. Most are aware that homeowners in financial trouble can often turn to bankruptcy protections to save their homes from foreclosure. But many in this situation worry that they may not have enough time to stop the foreclosure proceedings. When is it too late to file bankruptcy and stop a lender from foreclosing on your home?
The shortest answer is that you can file bankruptcy to fight a home foreclosure right up until the day of the sale. It’s not over until it’s over (and by over, we mean the foreclosure is complete, and the property sold).
A typical foreclosure starts with the lender sending the borrower a notice of default. When a homeowner receives the notice of default, they still have an opportunity to repay the delinquent balance and rehabilitate the loan according to a deadline set by the lender. If the borrower does not pay the delinquent balance by the deadline, the lender proceeds with foreclosure. A foreclosure typically starts about 90 days after the last payment. After 120 days have passed, the lender is required to issue a notice of intent to sell before they sell the home at a public auction. As long as the deed is not transferred to someone else, the foreclosure can be stopped at any time, including the date of the foreclosure sale.
When a bankruptcy petition is filed, the court immediately issues an injunction called the automatic stay. The automatic stay prevents all further creditor collection activities, including foreclosure. For this to work, you must be able to repay the past due amount, costs of the foreclosure, and meet future mortgage payment requirements on the house. Declaring bankruptcy puts the automatic stay in place for the duration of the bankruptcy and immediately stops the sale, but it does not stop the foreclosure. It stalls the foreclosure sale.
In some cases, the creditor will request that the court lift the injunction. The court may grant the request if they can show that the homeowner has no intention of making payments on the home or that the homeowner does not have the financial ability to make the required payments. The court may lift the automatic stay, but the homeowner still bought some time.
If you are facing a home foreclosure, you have options, and we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.
The post Bankruptcy Law: When is it Too Late to Stop a Foreclosure? appeared first on Kenneth C. Rannick, P.C..
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*$0 down to get your Chapter 7 case started applies to clients who choose to file a Chapter 7 bankruptcy with the U.S. Bankruptcy Court through Kenneth C. Rannick, P.C. We will open a Chapter 7 file for a client with as little as $0 down, however, our office will not file a client's Chapter 7 without an affordable down payment on attorney fees.
*$0 down to get your Chapter 13 case started applies to clients who choose to file a Chapter 13 bankruptcy with the U.S. Bankruptcy Court through Kenneth C. Rannick, P.C. Our law office will file a Chapter 13 without requiring any costs or attorney fees paid upfront for qualified clients who 1) have not had a prior chapter 13 dismissed within the past year, and 2) are not trying to stop a foreclosure within 20 days of filling bankruptcy.We are a debt relief agency.
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