I may have to file BK only to stop my Trustee's Sale date in two weeks because the Lender has not postponed or answered on my modification. I am back to work and can now afford my mortgage payment (or a modified one, preferably). I thought if I was in Chapter 13 and arranged to make my mortgage payments with the BK Trustee, the Lender wouldn't or couldn't ask for a Lift. Now I read on Nolo Press that because the Advance Notice is basically gone, they CAN ask the Court to Lift the Stay. NOW I'm getting really worried! Can one of you bright Lawyers give me some more details? Thank You!
I believe that the statement in Nolo was meant to convey that the foreclosure process is only stayed by filing bankruptcy, it is not terminated. Therefore, in many cases, if you lose bankruptcy protection (such as through relief from stay or dismissal of your case) then the foreclosure can often pick up where it left off - there is no need to start over. As a result, if the bankruptcy is filed on the eve of the foreclosure sale and is subsequently dismissed (such as if the debtor does not make their payments) then the foerclosure can be completed within a very short time.
A lender cannot generally get relief from stay if the mortgage arrears are properly addressed by the plan which is confirmed, the post-peition payments are kept current, and the debtor makes all of their plan payments.
Not sure what you mean by the "Advance Notice" (automatic stay, perhaps?), though creditors do have an ability to motion the court to "lift" the stay. Whether they choose to do this, and if they will be successful depends on several factors.
First, if you have already filed a Chapter 13 case that was dismissed during the past 180 days, then the automatic stay may be removed if you file again (look at the dismissal and Order in the first Chapter 13 case for details).
If you have not already filed a chapter 13 case in the past 180 days (....seems you haven't), then a creditor/lender must motion the court for relief from the automatic stay. This motion is not automatically granted. The lender's motion for relief from stay (MFRS) would also require a hearing to be set, and it would require the lender to provide evidence & facts to justify removing this powerful bankruptcy protection/shield, the Automatic Stay.
So, what do you do?
Well, if your income let's you afford your regular living expenses, as well as the regular monthly payment on (at least) your first mortgage...and your income is also enough to make a monthly Chapter 13 plan payment each month, then you may not be faced with the lender's MFRS. The Chapter 13 plan is also where you propose repayment for the arrears (past due amount) on your 1st mortgage. A court "confirmed" Chapter 13 plan be in place for between 36-60 months, and you are agreeing to make those payments on time each month, in-full, for the benefit of discharging unsecured creditors and staying in your home/avoiding foreclosure.
Incidentally, a Chapter 13 case may also permit a debtor to "strip off" and discharge junior liens, including 2nd mortgages, 3rd mortgages (if any), etc., etc. Talk about a true Loan-Mod, huh?
Essentially, the Chapter 13 case and Chapter 13 plan provide a "long-term strategy" for staying in your home and avoiding foreclosure, so long as you can afford these monthly payments. If you cannot afford these payments, then a Chapter 13 may result in only temporary relief for saving your home (in which case, it may be wiser to file a Chapter 7 if you have unsecured debt you seek to discharge and merely want another 2-3 months in your home before the lender gets permission from the BK court to resume the foreclosure process).
Chapter 13s are NOT easy to handle without a bankruptcy attorney... and even then, I have seen many "new" or inexperienced bankruptcy attorney's fail to understand the many requirements in a Chapter 13 case.
It's no surprise if you still have questions...most do, even lawyers. Contact someone who knows how to handle this issue.
Best of Luck!
By the way, it is FAR EASIER to stop a foreclosure sale from happening in the first place than it is to rescind or un-do a foreclosure sale that has already happened.
You've received two good answers. I'll add that that a Chapter 13 bankruptcy is designed for your situation as you describe it. You get to pay the mortgage arrears from monthly payments to the bankruptcy trustee (for up to five years), as well as paying some percentage of your unsecured debts in the payments to the trustee. If you can show the court that you can afford to make those trustee payments plus your current mortgage payments plus your living expenses, and you do make such payments, then there would be no foreclosure.
The notice requirements of foreclosure vary from state to state. If you received a Notice of Default under California law the document (sent certified, usually 2 or 3 copies) begins a 3 month waiting period. There is another 21 day waiting period after the 3 months. Filing a bankruptcy will stop the bank from taking the next step which is starting the 21 day period. Chapter 13 is complicated but I have been doing it for 19 years. I have an office in Antioch and give a free consultation.
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