Unfortunately, the costs of living and average household debt are ever-increasing. This makes foreclosure a reality for many Americans. Do you currently live in Southern California? Are you wondering if bankruptcy can stop foreclosure in Pasadena, CA? This is a common concern and one that fortunately, has a very inspiring answer.
Residents of Pasadena, California do have options for keeping their homes after one or more mortgage payments are missed. Are you currently worried about the future ownership status of your primary residence? If so, you should learn more about getting a bankruptcy automatic stay.
What Is An Automatic Stay?
An automatic stay is a court-ordered injunction. It helps protect you from creditors and allows homeowners to delay foreclosure proceedings until after their bankruptcy cases have come to an end. The automatic stay legally allows consumers to retain their properties while working out a resolution for their debt.
How A Bankruptcy Automatic Stay Works
When a person files for bankruptcy, an automatic stay becomes effective. This prevents creditors from proceeding with collection action. Also, it gives debtors a chance to regroup and it also provides greater peace of mind before filing for bankruptcy. However, there are a few key exceptions that people have to keep in mind. Above all, a stay will not be applicable to all creditors.
Also, there are creditors that have the legal ability to request to have a stay removed. Moreover, there are many times when courts will comply with these requests. When a stay is made applicable to property foreclosure, other essential considerations must be made. For instance, it is especially important for homeowners to take timely action.
Keep in mind, waiting too long to file bankruptcy and to use a stay to prevent foreclosure proceedings could render this option in debt relief inaccessible. Hence, it is vital for homeowners to reach out to reputable, bankruptcy attorney as soon as they believe that foreclosure is imminent.
When Does A Stay Go Into Effect
Automatic stays go into effect as soon as consumers officially file bankruptcy. As a property owner, you do not have to take any other action after having filed your bankruptcy petition for the related stay to become active. This will apply whether you file Chapter 13 or Chapter 7. But, you may not have access to these protections if you are classified as a habitual filer. This is someone who has filed bankruptcy before in the past and appears to have a habit of using this legal recourse as a regular means for resolving excessive debt.
The Limitations Of The Stay
A stay will only remain effective for just 30 days after bankruptcy has been filed. If, within the past year you have had a previous bankruptcy case dismissed. Moreover, if you have two case dismissals within the past year, you will never receive the protections of a stay at all. Once your stay becomes effective, you will have a variety of ways in which you can begin resolving your mortgage debt and other pressing debts. Which actions you’re allowed to take for your specific case, however, will be largely determined by whether you filed Chapter 13 or Chapter 7.
Chapter 7
In a Chapter 7 bankruptcy, all of the assets you own will be grouped within your bankruptcy estate. A trustee will be appointed to this estate to liquidate these assets. The resulting funds will be used to make restitution to your creditors. This remains true even if the cash value of your assets after liquidation is not sufficient for making a full restitution.
With the stay, your trustee will have sufficient time to sell your property off. Instead of letting it be foreclosed upon. This could allow you to settle more of your date via your bankruptcy estate. It is possible to offload real property and have sufficient funds for settling outstanding debts and providing additional funds for the consumer. The additional funds that can be pocketed or used to obtain new, primary housing among other things.
Chapter 13
With Chapter 13, automatic stays are in place to give consumers sufficient time for restructuring their debts. Meaning, your home could be saved and you may be able to remain living in it and owning it. In Chapter 13, you will be given a three to five year period to resolve your delinquent accounts. Whether in partial or in full. During this time, you will even be able to pay arrearages on your home mortgage loan. However, the ability to save your home with a filing, only exists when attorneys contact the trustees within a reasonable amount of time.
Why You Should Act Now
Taking fast action is always essential in these instances. You cannot wait for a feasible solution to your financial problems to fall out of the sky. Many foreclosures throughout the state of California are “non-judicial” in nature. Meaning, it is possible to foreclose on a property without an actual court proceeding. More often than not, these sales start with a recorded Notice of Default.
Once a Notice of Default is filed, you will have just three months before a sale date can be posted. The number of legal options continue to decrease as you approach this date. Therefore, your chances of success will diminish as well. Contact a seasoned bankruptcy attorney as soon as the Notice of Default is served. This enables you to learn more about the options that are available to you.
If you have any questions, please call us at 626-817-2611 and check out our Pasadena site.