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One can file any type of bankruptcy to
stop a foreclosure on a home. However,
if one were to file a Chapter 7 bankruptcy, typically the mortgagee will file a motion
to lift the automatic stay in the bankruptcy court to allow them to proceed to
Judgment and a sheriff’s sale of the property. One would have approximately 30
days to come up with all the pre-petitions arrearages to payoff the mortgagee’s
claims.
Because of this, we
normally recommend the filing of a Chapter 13 Bankruptcy in a foreclosure
situation. This
form of Bankruptcy requires a debtor to remain current on their normal recurring
monthly mortgage payment; but allows them to pay off the pre-petition arrearage
over a "reasonable" period of time. The court in this jurisdiction has
interpreted that to mean approximately 24 to 30 months.
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