Hello, and thank you for contacting Just Answer. My name isXXXXX am a bankruptcy law professional and I look forward to answering your question this evening.
Here is the good news, a bankruptcy filing should in the very short term stop any creditor, including a lender who has a secured interest in your property, from taking action to collect, including foreclosure. Filing a bankruptcy petition
puts in to place an automatic stay
of action on any creditors trying to collect on a debt, including trying to seize property on a secured debt through foreclosure. So, in the very short term (we're talking possibly a few months), a bankruptcy should stop a foreclosure.
Now, here is the bad news. If you are behind on mortgage payments, chapter 7 bankruptcy will not help you keep your property. Generally the mechanism under the law to keep real property (such as a condo) in a chapter 7 bankruptcy is to "reaffirm" the debt, meaning to sign a new agreement with the lender agreeing that you will continue to pay on the debt even after bankruptcy. The problem here is that if you are already well behind, the lender is not obligated to reaffirm the debt and, even if they are willing, if you are too far behind the court may not approve the reaffirmation
. While the chapter 7 bankruptcy will wipe out the underlying debt on the condo, it does not prevent the creditor from foreclosing on the home, they still have a right to do that, once the bankruptcy stay has been lifted at the close of the bankruptcy proceedings.
Further, you cannot take a home mortgage or loan off of the list of debts in a chapter 7 bankruptcy, you are required to list all of your outstanding debts, both unsecured, such as credit card debt
, or secured, such as a home mortgage or car loan. All debts must be listed.
So, unfortunately, the only way to make sure that a home is kept in bankruptcy is to reaffirm the debt on the home. If you do not have an attorney representing you, you can contact the creditor who holds the loan to see if they will reaffirm. Keep in mind that if you are too far behind on the debt, they may not be willing, and even if they are the court may not approve it, but it is worth checking with the creditor.
Now, if the condo association somehow had already seized ownership of the property (which it is correct that you should have received notice of a court date for this), it may be a moot point. You may want to check with the clerk of court for the county in which you reside, to see if there was ever a foreclosure case filed against you and if the court issued a judgment giving the property to the condo association (presumably for unpaid condo dues, or something of that nature). In either event, at this point it may be too late to save the home. I wish I had better news for you, and at the very least in a chapter 7 bankruptcy all of the debt will be wiped out.
I appreciate the opportunity to answer your question, and please let me know if you have any additional questions or need clarification of anything I have said (never be afraid to ask for clarification!). Otherwise, please remember to RATE my answer positively so that I can receive credit for my work. Please also remember that I have an obligation to provide honest information, and that even where the news is bad, I have an obligation to provide bad news honestly.