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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I have a question about the automatic stay in a chapter 7 bankruptcy. Suppose

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I have a question about the automatic stay in a chapter 7 bankruptcy.

Suppose a house is worth $100,000.
Suppose the first mortgage is $50,000 and the 2nd is $50,000.
How long is the automatic stay from the bankruptcy in effect? Does it extend after discharge and closing of the BK?
Does the 2nd mortgage have to request relief from the stay in order to foreclose?
If they never requested relief and the bk was discharged and closed can they ever foreclose if the debt was never reaffirmed?

cfortunato :

HiCustomer

cfortunato :

The automatic stay goes into affect as soon as a Bankruptcy is filed, and then stays in effect until discharge or case closing, whichever comes first, unless a creditor applies for and receives relief from the automatic stay (via a motion).

cfortunato :

The automatic stay does not stay in effect after discharge and closing of the Bankruptcy case.

cfortunato :

Any mortgage company would have to request relief from the automatic stay before foreclosing if, and only if, a discharge has not already been issued, and the case has not yet been closed.

Customer:

so the 2nd mortgage CAN foreclose as soon as the BK is discharged?

cfortunato :

Yes - once a Bankruptcy case is discharged and/or closed, a first or second mortgage company can proceed with foreclosure whether or not the mortgage has been re-affirmed, and whether or not the mortgage company has asked for (and received) relief from the automatic stay.

Customer:

thanks

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