Filing for bankruptcy will stop the foreclosure proceeding, at least temporarily. The Automatic Stay, an order issued by the court, requires your creditors to stop actions against you immediately. This means that even if a foreclosure sale on your house is scheduled, it must be postponed while your bankruptcy is pending. This is usually good for three to four months’ worth of postponement.
There are two exceptions to this law:
1. Your lender can decide to ask the bankruptcy court to lift the stay as it applies to your home. If the judge approves a motion to lift the automatic stay, you won’t get the benefit of the three to four months postponement. However, the additional court requests would like still delay the foreclosure for a short while.
2. A lender must give the owner notice that it intends to hold a foreclosure sale. Once that notice is made, bankruptcy will not stop the clock on the notice. Let’s say you receive a document that informs you that the bank will hold a foreclosure sale in three months. Your file for bankruptcy a month later. You will only have the remaining time on that notice (two months) before the lender can file for a motion to lift the automatic stay. If they succeed in getting the motion approved, your sale will likely go forward on schedule.
If you are facing foreclosure or in over your head financially, speak to an experience Cherry Hill, NJ bankruptcy lawyer who can explain your options and protect your families’ interests. Joel R. Spivack, Esq. has been helping families for more than 20 years. Contact him today for a free consultation about your situation.