Bankruptcy Questions Answered

movetoaction asked:

National People’s Action’s (NPA) Save The American Dream campaign is an aggressive organizing and public education campaign aimed at keeping families in their homes, outlawing predatory lending, and expanding the Community Reinvestment Act. The campaign was launched on the front porch of a ripped off homeowner in Cleveland, Ohio. Standing in the zip code with the highest foreclosure rate in the entire nation, community leaders from 10 states presented a platform and action steps for the industry, regulators, legislators, and the administration. ________________________________________ NPA is a national network of community-based organizations that work on the local and national level to build grassroots power in the service of a more just and equitable society. Join the movement! Visit us at: www.ntic-us.org

BRANDI A asked:


My townhome is scheduled for foreclosure sale date May 13th 2009.
My chapter 7 bankruptcy will be filed 3/25/09. How long will this delay the foreclosure sale?

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Mzdandylion0527 asked:


Everything that i’ve read says that you can get a home after 1 year in a ch 13 bankruptcy, 2 years after ch 7 bankruptcy, and 3 years after a foreclosure. I am about to file a chapter 13, and wonder how long would I have to wait before I could purchase a home. Does anyone know the actual rule and could you point me to the website or where you got your information?

Thank you!

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Legal Helpers asked:


Filing for bankruptcy is a scary and challenging thing. There are many laws that you must follow exactly in order to correctly file your bankruptcy, not to mention understanding each of the separate types of bankruptcy you can file. For someone that does not have any experience with filing legal documents it can be daunting to file these types of paper work. If these bankruptcy papers are not filed correctly, it can end up being a bigger problem then the one that led to the need for a bankruptcy to begin with.

If time is of the essence it maybe better for you to find an attorney that specializes in bankruptcy. A bankruptcy firm could be the easiest place to start; because they are all lawyers that have specialized in bankruptcy law and all work in the same building together. The simplest explanation of this is a law firm where all of the lawyers have specialized in bankruptcy law.

Hiring a good bankruptcy firm means that there are several lawyers within that firm that can assist you with your case. For instance if you are in a situation like foreclosure that is time sensitive but your lawyer does not have a day available to deal with this situation a lawyer in the firm can step up and assist you to prevent a worse situation then the one your already in. If you are with a solo bankruptcy attorney you could end up having a bigger problem. Hiring a bankruptcy firm could be one of the best choices during a bad situation.

When you are dealing with bankruptcy, you know that there are many questions that you would like answered. One of these questions is always going to be what happens with bankruptcy property. Property usually falls into two different categories - the property which is items that you own, and the actual property that is land or buildings. These two types of property have different rules and regulations when it comes to bankruptcy.

The rules regarding bankruptcy property are confusing because property falls into different categories. This means that when you are starting the process of filing for bankruptcy, one of the most important things that you do is take a careful inventory of your property and have your bankruptcy firm help you decide which parts of your property are parts that will be included in the bankruptcy filing, and which are not going to be included.

After you have divided up your property, you should know that when it comes to bankruptcy property, some of it is going to be counted against you, and some of it will be counted for you. The bigger pieces of property can be sold to the bank and these will help you get rid of some of your debt. The smaller pieces can be kept, and this will help you go on with your life as you usually would, even as you are filing for bankruptcy. No matter what types of property you are dealing with, you should know that bankruptcy property is always going to be confusing, so the best thing to do is to make sure that you talk to your bankruptcy advisor.



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Keith Lee asked:


When it comes to foreclosure, some people are not sure whether they should allow that to take place, or just file for bankruptcy. It’s important to keep in mind that the decision is not an either/or decision, and as such, cannot be made lightly.

What is Foreclosure?

An act of foreclosure can occur when the mortgage lender does not receive the monthly payments they are entitled to. The only way to stop this from occurring is to pay the mortgage lender. These types of loans are like car loans, in which you would lose your car through repossession if you didn’t pay your bills. Like repossession, foreclosure will take away a person’s home if they do not keep up with the monthly payments they owe on their mortgage.

Can Filing for Bankruptcy Help Then?

For people who cannot pay their debts, sometimes they file the legal action of bankruptcy. The purpose of this action is to stop all the civil action against the debtor while the debtor is in bankruptcy. A foreclosure can be halted through these means because lender is required to cease all their legal actions against the debtor. Lenders respond by filing for relief from this order, and once they are invariably granted such relief, the legal action will continue forward and the house lost.

The bottom line is that bankruptcy does not stop foreclosure and it does not allow a debtor to keep a house without paying the mortgage lender. Bankruptcy will slow the action, but it will not prevent it.

Benefits of Bankruptcy Filing

Even though it doesn’t stop foreclosure, bankruptcy can also be beneficial in that it will allow a person additional time to make payments, or make it easier to pay the lender. Bankruptcy makes a mortgage lender pause in their foreclosure efforts, and a debtor has a little extra time to raise the money.

Also, since bankruptcy can discharge some unsecured debts, a debtor may have more money with which to pay his mortgage payments. Through a chapter 13 bankruptcy filing, the debtor is able to - through a court order - pay their mortgage catch up over a period of time rather than all at once.

Consult Your Bankruptcy Lawyer

What you must realize, of course, is that there are legal fees to pay for bankruptcy, and not everyone is eligible to file for bankruptcy in the first place. Legal bills can be quite high, and high enough that they outweigh the costs of catching up with the mortgage.

It is imperative to talk over bankruptcy with a knowledgeable lawyer if you are going to attempt to stop foreclosure. Bankruptcy is so detailed that you should not try to handle it by yourself.

The material offered in this article should serve only as a general guide, and for more specific information, you should contact a licensed lawyer in your state.



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In bankruptcy Chapter 13 mortgage foreclosure is either stopped or at least temporarily avoided. Here’s how.

First, just in case you are not familiar with a Chapter 13 bankruptcy, it is a bankruptcy court approved payment plan where the debtor (the person filing bankruptcy) pays a bankruptcy trustee each month and then the trustee pays the debtor’s creditors.

There are several aspects of a Chapter 13 bankruptcy that work to help people facing mortgage foreclosure. The first aspect is actually applicable to all bankruptcies. It is called the “automatic stay”.

By law, whenever anyone files bankruptcy, regardless of the type of bankruptcy, there is an immediate “automatic stay” (automatic temporary stopping) of most civil proceedings against the person filing bankruptcy. What this means is that if someone is facing mortgage foreclosure and the person files bankruptcy, the mortgage lender has to immediately stop its’ foreclosure action until it gets permission for the bankruptcy court to proceed.

In a Chapter 13, the bankruptcy court will not lift the “automatic stay” and grant the mortgage lender permission to proceed with a foreclosure until the debtor (the person filing bankruptcy) fails to make his payments to the bankruptcy trustee. As long as the debtor pays the monthly payments to the trustee and pays his regular mortgage payments, the “automatic stay” will remain in force and the mortgage lender can not do anything.

The second aspect of a Chapter 13 that works in favor of people facing foreclosure is that it allows a debtor to pay mortgage arrearage over time, normally 3 to 5 years. In most foreclosure cases, a person has not paid his monthly mortgage payment for several months and the mortgage lender demands full payment of the delinquent monthly payments (arrearage) in lump sum before the lender will consider stopping foreclosure. Most people cannot pay the lump sum.

In a Chapter 13 bankruptcy, a debtor can pay the arrearage over time. He does not have to pay it all at one time. Spreading the lump sum over time means paying smaller monthly payments until the total arrearage is paid. A creditor can object to the amount to be paid each month towards the arrearage, but once the bankruptcy court approves the payment plan, the creditor can not do anything except take the payments.

A third aspect of a Chapter 13 bankruptcy that helps people facing mortgage foreclosure is that unsecured creditors may be paid a portion or all of what is owed to them. What this is really doing is reducing the amount of debt that a person has to pay back each month. By paying unsecured creditors less each month, there is more money available with which to pay a secured creditor such as a mortgage lender. Therefore, it should be easier for a debtor to pay his monthly mortgage payment.

This is general information. If you need specific information or have any questions of any nature whatsoever, talk with a lawyer licensed in your state.

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