Essentially, yes. Filing for bankruptcy does pause a foreclosure proceeding. It’s not however, the end of the foreclosure procedure.
11 U.S.C. §362 of the Bankruptcy Code is normally stated to as the “automatic stay”. A bulk of bankruptcy filings in New York and on Long Island make full use of the automatic stay. The whole thing as follows:
An individual is currently being sued by a debt collector. Even though most of us are way more anxious with a “foreclosure” than a petite claims action the two lawsuits do come down to a debt collector suing an individual. The individual may not be prepared for the law suit, and may not realize the consequences of the lawsuit or may even be running from the lawsuit. So, now, the individual gets a letter proclaiming that the debt collector is going to demand for a “default judgment” that may take their bank account, their income or even their house. Rather than lose properties that may be menacing to the people involved, they can file a bankruptcy and gain the “automatic stay”.
So, in the progress of a foreclosure proceeding a personal may file bankruptcy under Chapter 7 and the action will be remained or stopped. The mortgage doesn’t go away, the lawsuit does not disappear, but the person is given a “breathing” period with which to plan an approach. The legal team at NYBankruptcy.com will plan out a tactic specifically designed to your financial circumstance.
Once your Chapter 7 bankruptcy is filed you will have a clear consideration of the substance in front of you. The income that was about to pay debts may now be use as revenue that can be used on your mortgage. Income performances or “garnishments” may be removed. In fact, the Court, itself, may assist in an alteration of your mortgage.
It’s vital to remember that the lawsuit is not settled. The bank will maybe, move the Court to “lift” or end the automatic stay. If actual, the bank may carry on the foreclosure lawsuit. However, the individual will have a chance to speak and, possibly, fix the issue in the bankruptcy filing. Outside of a foreclosure it’s unusual that a creditor will follow to lift the stay. Most of the time once a lawsuit is at a full stop it is likely concluded for good. Remember, each case differs.
As with any condition, there are guidelines that must be followed before a Chapter 7 may be filed. The legal team at NYBankruyptcy.com understands the significance of the individual and the details of each and every matter.
We understand the fear that comes with being sued. But the worst possible approach is to pretend that nothing is happening. You have rights. NYBankruptcy.com knows and will explain your rights. Call NYBankruptcy.com today for a free consultation.