Will a bankruptcy help stop or stall a foreclosure?

[BrokeIn2011]

I live in Los Angeles, California (a non-judicial foreclosure state).

As I consider BK as an option to try to save my home from foreclosure, I was wondering approximately how much time do I have between filing for BK and a BK court date to determine if I might be able to keep my house that is in foreclosure? I have less than 90 days before the Trustee Sale. Yet I am not sure if I might go with a BK 7 or BK 13.

Yet I was thinking more about BK since receiving a letter from a BK lawyer over the weekend that said the following (see below). So I was just wondering for those of you familiar with California BK and foreclosure law, would a BK help stop or stall a foreclosure in my case?

Please review and advise. Thank you.

“Dear Homeowner,

You can stop the foreclosure sale of your home and any other real property in which you have an interest, instantly and automatically, by operation of law, by filing a Chapter 13 bankruptcy before the foreclosure sale is held.

Our office can e-file your petition at any time, 24 hours a day, 7 days a week, up until the time of the foreclosure sale and the sale will be stopped. This will also stop the mortgage company or bank from continuing to add extra charges. After your case is filed, you will be allowed up to five years to catch up on missed mortgage payments, in monthly installments; often with the first year or two installments at a reduced rate. etc. etc. etc.”

[espo1357]

Yes, it stalls it.

If you don't have long term plans to stay in the home (your interest rate adjusts, your home is way underwater, etc), then I would go for a 7 if you qualify. If you want the home, and can afford it long term, then a 13 would strip the second if you have a second mortage, and the 13 plan would include the arrears on the first mortgage, that you can cure over a 3 to 5 year period.

You just have to make a long term decision on the home, and then go from there. I made the mistake of doing a 13 to save the home, when I should have done a 7 and walked. Now, I am stuck with this home. And, even though its a good home, I could use the flexability to move. So, be sure you really want the home if you are going to do the 13 because the 13 is a major pain in the ass.

[ryan]

Don't know how long specifically in California, but in many jurisdictions it can stall it for 60 days +.

[helpme2010]

A 7 stalled me about 4 months (1 month before the 341 meeting and 3 months after). Each lender is different. My lender gave me 2 weeks warning before the auction date just 3 weeks after my chapter 7 was discharged, so I filed a 13 to buy me more time (estimated 2.5 months minimum), I tried to do a loan mod, but today when I called, they told me they would not do it because of the bk. But this should give you a rough idea what time you can buy with bk. But each lender has a different time table. Unfortunately my lender one west bank/indymac bank is being hardcore greedy to get this house. Why they want this piece of crap house in this area so bad amazes me.

Now they will have to play rough and I will give them a fighting battle to get this house back (or once I get a job, they can have this dump - for a price). But I am going to make them really work hard to get this place. Once they get it, they will have a boat load of repairs to do. ahahahahah

[BrokeIn2011]

I sincerely apologize to you all for my taking so long to reply back and I also thank you all for being so nice and kind to help me on this subject, however the past few weeks have been a nightmare for me (as some of you now already know, from my prior postings today). Today is the first day that I have been able to make it back to the forums, to reply back and thank you for your help.

I have been tending to a semi-invalid 91 year friend all this year, then I came down with a bad cold 2 weeks ago, my car broke down on me twice (since I made my original posting) and I did not have the money to get it fixed right away both times, and I have been very down and glum over my financial situation. Yet at least I had enough money yesterday to get my car fixed, so now I have a car again.

Based on what you three have shared (Espo1357, Ryan, and Helpme2010) it has been a big help. Thank you so very much for your help. Helpmen2010, good luck on your project, it sounds like you have an interesting ongoing story with your lender. Have fun with it.

[Billssuck]

In my case, it's been 11 months since I made my last mortgage payment and BOA still hasn't filed a motion for relief of stay to start foreclosure. I think someone looks at my case, decides it too hard with the active ch13 and with the Countrywide/BOA scandal that went on. Who knows. But yes, a BK can stall a foreclosure...some people more time, some others less.

[BrokeIn2011]

Thank you Billssuck. I appreciate your input. That is really great by having your Chapter 13 in place, that could be keeping B of A from filed a motion for relief of stay to start foreclosure. Good luck to you, and I hope that everything works out the way that you want it to.

[helpmeout]

Filing BK will stall the foreclosure. But a relief from the stay is fairly easy to get. As for the Chapter 13, you can certainly use that to get caught up. But that isn't going to solve the issue of why you got to this point. One thing you need to ask yourself: Can I really afford the house?

[BrokeIn2011]

Thanks much the additional input Helpmeout. It was informative.

[Cherinfo]

I surrendered my home in chapter 7 which is a no asset case. My bank received a relief from stay almost 4 months ago. I keep checking court dockets and nothing has happened. Waiting for the next step which should be request for motion for summary judgement? Someone please correct me if I am wrong because from what i am understanding I will have 30 days once judge gets this request from my bank.

[HHM]

http://www.**********.com/blog/2011/...nk-foreclosed/

[mwr]

You've received good advice here. I'll add that a Chapter 13 can usually keep you in your house longer than a Chapter 7, even if you're not making payments, because most lenders aren't so quick to move for relief from the automatic stay in a 13. Then if you run out your string in a 13 and can't (or don't want to) get a confirmed 13 payment plan, you can convert to a 7 and get some more time and also discharge your unsecured debts (assuming that you qualify for a 7). All this is pretty complex stuff and you should get a qualified bankruptcy attorney in your local area.

[overspent]

My chapter 13 bought me 5 months. My sale date was Oct 11. I filed Oct 4, 2010 30 days for 341 hearing another 30 days for first confirmation hearing, delayed for a couple of times brought me to end of March 2011. The total cost was $274 filing fee. My legal insurance pay my attorney fee. I wanted to stay long enough to see what kind of paperwork BOfA has in term of standing. I recently dismiss the case since foreclosure by BOfA has stopped. The first sale date is not scheduled till August 2011. Also the climate at least in Oregon has turned in favor of the homeowners. Sincd Oct 2010, the bank has lost 5 cases due to transfers by securitization not originally recorded. Banks now has to take homeowers to court to foreclose and has to prove standing. That 's going to be difficult in my case. Filing chapter 13 bought me the time to challenge the foreclosure and I'll refile if I have to. Right now I am just waiting for a new sale date to file my own fraud charge against the service and current holder.

[BrokeIn2011]

Well I just wanted to give you all a quick update. Since my last posting on this post, I talked with my family (my siblings), and they agreed to try to help me out. As of April 19th, my house was taken out of foreclosure. Then this week, I made the first mortgage payment (since my mortgage was re-instated on April 19th), I got my homeowners insurance reinstated on Tuesday, then yesterday I got caught up on all of my past due property taxes. It is been a great week thus far. I guess never underestimate the power of family and or friends when you are in a crises. I thought sure my brothers would hate me and never speak to me again once they found out all of the financial trouble I was in. Yet I was surprise that they were willing to try to help me, under the circumstances . . . and they were just so nice and loving as can be under the circumstances. Yet I was even more surprised that they had money available to try to help me. So I guess it was a blessing in disguise when those scumbag bottom feeder companies started telephoning one of my brothers in regards to trying to save the house from foreclosure . . . which in tern forced me with a good opportunity to sit down and tell my brothers everything about ALL of my financial troubles.

Good luck to you Cherinfo, and Overspent. I hope that the foreclosure news story on “60 Minutes, called The next housing shock” on April 3, 2011 will be able to help you two. Since it seems that many of the major banks are involved in that fraudulent document signing fiasco (since I know mine is, Bank of America) , since they could not produce legitimate information and documents on who owns the original note. So hopefully people who are in foreclosure will be able to use the “show me the note” option as a way to stop or drag-out their foreclosure process.

Thanks for the input and help HHM, and Mwr.