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Bankruptcy in Brief

             a service of the Moran Law Group

Can I save my house from foreclosure?  

The filing of bankruptcy triggers the automatic stay which stops all creditors from any action to collect their claim including foreclosure.  

In Chapter 7, the stay lasts only as long as the property is not abandoned by the trustee, as either valueless to the estate or as exempt, or until the case is closed. 

A creditor secured by the house can seek relief from the stay to complete the foreclosure if there is danger that the secured claim will become greater than the value of the security during the bankruptcy.  

Since the creditor's lien is not eliminated by the bankruptcy, Chapter 7 provides temporary relief from foreclosure, but no lasting solution.  

In contrast, in Chapter 13 the stay lasts as long as the case is pending. Chapter 13 is designed to allow debtors to cure defaults in their home mortgages by paying the arrearage over as long as 3 to 5 years. 

                    blueedgedbulltet.gif (1080 bytes)  More on Chapter 13.  

blueedgedbulltet.gif (1080 bytes) More on foreclosure in California

California foreclosure timeline

                    blueedgedbulltet.gif (1080 bytes)  Secured debt in Chapter 7 

                      Automatic stay

                      Mortgage debt after bankruptcy

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