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JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience:  Attorney in the practice of Bankruptcy Law since 1996
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MY HOME IS SCHEDULED FOR FORCLOSURE ON 7APR AND I AM CURRENTLY

Customer Question

MY HOME IS SCHEDULED FOR FORCLOSURE ON 7APR AND I AM CURRENTLY IN CHTR 13. THE LENDER WILL NOT ALLOW MY BANKRUPTCY PAYMENTS TO CONTINUE DUE TO I GOT BEHIND WHEN I LOST MY SON IN A TRAGIC DEATH IN OCT2008. IS THERE ANYTHING THAT I CAN DO TO KEEP MY HOME FROM BEING FORECLOSED ON. IS THE BANKRUPTCY LAW IN EFFECT WHERE THE JUDGE CAN STEP IN AND ASSIST ME WITH THIS SITUATION UNDER MY CURRENT CHPTR 13
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 7 years ago.
Wilson:

I'm sorry to hear that. The decision of whether a lender can or cannot foreclose property is not up to the lender, it is up to the Bankruptcy Court. Apparently, you got behind on mortgage payments, so Countrywide requested "relief from the stay" from the Bankruptcy Court, which means they asked the Bankruptcy Court for permission to foreclose. If you failed to object to their motion, then the Bankruptcy Court would likely have granted their motion and gave them permission to foreclose (see 11 USC 362(d)).

So, it is unlikely that the Bankruptcy Court will now stop their foreclosure since it gave them permission to foreclose. If you had a valid reason why you got behind on payments (and your reason is certainly understandable), you should have told the reason to the Bankruptcy Court before it granted Countrywide's request for foreclose. Now that your deadline to explain your side of the story has passed, it is likely too late to go back now and attempt to explain what happened, but not impossible. Some courts will allow a debtor to "reinstate the stay," meaning the Bankruptcy Court will go back and stop the foreclosure sale it already approved, if the debtor can show why he or she missed the objection period and the reason is satisfactory to the Bankruptcy Court. Different courts have different dispositions toward reinstating the stay, and I don't know what your local court's disposition is. You may have a decent chance at getting the stay reinstated if you can show what happened and present a really good plan to get caught back up on the mortgage in a relatively short period of time, or you may have no chance. You will really need to ask your lawyer. But, if the foreclosure sale date is only 4 days away, you may have waited too late to try this approach since it may be difficult to file the motion to reinstate the stay, get into court, get it granted, and get the sale stopped in only 4 days. You should discuss this option with your attorney.

Another option is to dismiss the pending Chapter 13 and re-file a new Chapter 13. If the current Chapter 13 is the only bankruptcy you have had pending in the past 12 months, then if you file a new Chapter 13, you will have a new stay for 30 days which could stop the foreclosure sale, though you would have to file a motion in the Bankruptcy Court to extend the stay very quickly after filing the new case (see 11 USC 362(c)(3)). Again, you may have waited too late though because it may be difficult to get the existing case dismissed and a new case filed in only 4 days. It is especially difficult because you cannot dismiss the case yourself, it has to be dismissed on the trustee's (or some other entity's) motion since you cannot dismiss the case yourself once a motion for relief has been filed or you have a minimum waiting period of 180 days to re-file a new case (see 11 USC 109(g)(2)). Again, you will need to speak to your attorney about this.

Finally, you may be able to buy yourself some more time if you can file a motion in the state court foreclosure proceeding asking that the state court postpone the foreclosure sale scheduled for April 7. If you can convince the state court that you have a reasonable chance of saving the home through a modification with Countrywide or through the bankruptcy, the state court may push the sale back 30 or 60 days to give you time to do something. Again, different courts have different dispositions about this sort of thing, so you will need to speak to your attorney about whether this might work in your jurisdiction. If you are in a self-help foreclosure state, then there may be no state court involvement in your foreclosure, in which case this option is probably not available, though you should talk to your attorney about this.

Whatever you do, if the foreclosure sale is scheduled for April 7, you need to do it quickly! I suggest you contact you attorney TODAY and ask about these options or any other options you attorney advises you are available in your jurisdiction.

I hope this helps and a positive feedback is always appreciated if this was useful to you.

Good luck!

Joe

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