Should we file a Bankruptcy before we get a notice of default (on our home)or after?

[technoreid1]

Our home is going to be foreclosed on by the bank, but we have not yet received a notice of default yet (which in California would give us 115 days to vacate (walk away from) the property from the time the NOD is filed with the county recorders office.

We also have 85k in credit card debt.

Should we file Bankruptcy BEFORE we get a notice of default (on our home) or AFTER we receive a notice of default?

Our attorney has said that we could do it both ways but says it's best to file a bankruptcy (CH7 or 13) before we get the notice of default because then the mortgage company WILL NOT be able to even file the notice of default and that the mortgage company would HAVE to go to court and get what's called "Relief From Stay" --- Which our attorney said they MIGHT NOT even do that which would possibly give us more time in the home to save $ so that we can rent.

Anybody have any opinions on this. I would really like to hear from you!

thanks, rrp

[BassBoy]

Your attorney is right and you can do it both ways, but I agree filing before the default notice will hault the NOD from being filed. On the other hand, if you are in default, the lender WILL lift the Automatic Stay and continue with the foreclosure. Sure, it will buy you some time, but maybe no more than 2 months. I do not agree that your attorney makes an accurate assessment that the lender might not lift the stay. At least I've never heard of that happening. In all honsety, the lender is going to foreclose and they will go through the motions to do so. How long you have in the home depends on how quickly everyone moves.

[technoreid1]

Thanks for your response! I really appreciate it!

So the way I take it is this: (please correct me if you think I am wrong)

If we file a BK before the NOD, the mortgage company will go to court to lift the automatic sometime after the filing of the BK, and then start the foreclosure proceeding (which is about 115 days to sale) while we are in bankruptcy....

hypothetical below....
So that if we were to file our BK on say Nov 20th and our bankruptcy was discharged Feb 20th...(3 months later) * but our mortgage company GOT THE STAY LIFTED and started foreclusure procedures on Dec 20th which would allow us to stay in the home for 115 more days....

****Our BK would be discharged Feb 20th but we would still be able to live in the home until the sale date of the home which would be like May 5th??

I guess what I am trying to get at is even though our BK would have been discharged Feb 20th, would we be able to still stay in the home after our BK discharge date because the lender would still have to foreclose on us according to CA laws?


Thanks, rp



(100 days until sale of property)

Your attorney is right and you can do it both ways, but I agree filing before the default notice will hault the NOD from being filed. On the other hand, if you are in default, the lender WILL lift the Automatic Stay and continue with the foreclosure. Sure, it will buy you some time, but maybe no more than 2 months. I do not agree that your attorney makes an accurate assessment that the lender might not lift the stay. At least I've never heard of that happening. In all honsety, the lender is going to foreclose and they will go through the motions to do so. How long you have in the home depends on how quickly everyone moves.

[BassBoy]

Thanks for your response! I really appreciate it!

So the way I take it is this: (please correct me if you think I am wrong)

If we file a BK before the NOD, the mortgage company will go to court to lift the automatic sometime after the filing of the BK, and then start the foreclosure proceeding (which is about 115 days to sale) while we are in bankruptcy....

Yes. During your BK, the lender will lift the stay and continue with the foreclosure.

hypothetical below....
So that if we were to file our BK on say Nov 20th and our bankruptcy was discharged Feb 20th...(3 months later) * but our mortgage company GOT THE STAY LIFTED and started foreclusure procedures on Dec 20th which would allow us to stay in the home for 115 more days....

This is probably a good assessment.

****Our BK would be discharged Feb 20th but we would still be able to live in the home until the sale date of the home which would be like May 5th??

Yes, you would be able to stay until the very end.