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What are the rights of a homeowner on disability faced with a sheriff's sale or filing for Chapter 13 bankruptcy protection?

Phoenix, AZ |
Attorney answers 5


No. If you do not pay a debt secured by your home then the lender can foreclose. You can investigate chapter 13, but understand that chapter 13s are very complicated. It is wise to talk to an experienced chapter 13 bankruptcy attorney before deciding to take this important step. I am attaching a link to some free videos that explain how bankruptcy works. Most Arizona consumer bankruptcy attorneys offer a free consultation about the basics of bankruptcy.

Please take time to educate yourself about bankruptcy and to determine which attorney is the best to assist you in the process. Don’t assume the attorney is being completely honest about their experience and capabilities. Check them out. Avoid the attorneys who advertise on TV or profess a 100% success rate in their Internet ads. It costs hundreds or thousands of dollars for these ads and someone has to pay for them – the clients. These attorneys mass produce the work and do not offer the client the hands on assistance that is necessary in a well-planned bankruptcy. Normally these firms assign all or most of the work to paralegals and the client rarely talks to an attorney.

When interviewing the attorney ask them how long they have practiced bankruptcy law. Ask what percentage of their practice is focused on consumer work. Ask whether they are experienced in both chapter 7 and chapter 13 cases. Ask the attorney for references. Ask about their policy of returning phone calls. They should be committed to answering specific questions about your situation and help you understand your options. If, after talking with them you are still confused about the issues you raised, find another attorney. Check them out with the various ranking sources: such as, and the State Bar. An attorney is should be your guide through this process. They should educate you, be there to assist you in how to avoid pitfalls and help you plan for your future after bankruptcy. There are hundreds of “bankruptcy” attorneys in Arizona. Of those just a few will fit the criteria set forth above. Again, bankruptcy is a very complicated process and you want to use an attorney who will be there when you need them.

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This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the bankruptcy code requires that we call our firm a "debt relief agency." This information is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the related issues. Nor is this advice intended to create a client - attorney relationship. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.

Susanne Ruiz Rodriguez

Susanne Ruiz Rodriguez


Just to add something to the mix...Homestead exemptions and the qualifications for them are normally state law questions so it will vary from state to state. Ms. Drain is correct - you need an experienced bankruptcy attorney who knows AZ law on homestead exemptions.


If you mean a trustee's sale because the home mortgage lender is foreclosing for non-payment, then no. A declaration of homestead will not stop a trustee's sale in this instance. If instead there is a sale because of a judicial lien, unrelated to the secured claim, the declaration of homestead will help, but you likely will need to file for an injunction before the sale occurs.

A bankruptcy will stop a sale from happening, but if it is the mortgage lender, then the creditor can file a motion to lift the stay so that the sale can proceed unless you can resolve the arrearage. A Chapter 13 can allow you to propose a plan to resolve any arrearage to the lender, but you must have sufficient income so that a plan is proposed in good faith.

As Ms. Drain stated, talk to a bankruptcy attorney about your options.

I am an Attorney with Fife & Cesta, a compasionate bankruptcy firm conveniently located off the US 60 in Mesa, Arizona. In addition to our other areas of practice, Fife & Cesta is a debt relief agency. We help people and families file for relief under the bankruptcy code. The answers given here are based on the information in the question, but for a complete answer you should have a consultation with an attorney you trust. Call (480) 850-6541 for a free bankruptcy consultation. We carefully evaluate your situation and give you real advice.


A homestead only protects real estate from a forced sale by a judgment creditor. That law applies whether someone is disabled or able bodied. No one would lend money to purchase a house on a mortgage if the mortgage company wasn't able to foreclose when payments became delinquent. There is no Santa Claus in real estate! A Chapter 13 can allow someone to catch up on their past due payments over 5 years but they have to resume making the ongoing payments. Hope this perspective helps!


I think you should consult with an attorney if you do not have one


By on disability, I'm assuming you mean collecting government benefits due to the person's disability. Persons on disability do not have any additional or different rights when compared to persons not on disability when it comes to home ownership. If Chapter 13 is filed, you may be able to keep the home based on the agreed-upon payments in the plan.

It is false that a person who has been on disability for more than two years cannot have their house taken away. When you got the mortgage and signed the note, you gave certain rights to the lender to foreclose based on basic real property and contract law.

As a side note, I've helped people get loan modifications on their mortgages. That may be a good route to go if your income is from the government and the lender can bank on that income being there indefinitely.

Disclaimer & Helpful Information: This answer is intended to provide legal information- not legal advice. Such materials are for informational purposes only and may not reflect the most current legal developments. Customized legal advice for your particular situation should be provided by a licensed attorney only after full disclosure of all relevant facts and after signing a retainer agreement with an attorney or law firm. SALMU LEGAL SERVICES PLLC: Alex Salmu, Attorney At Law | | | Phone: (248) 877-1016

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