The Dayton Bankruptcy Attorney: Using Bankruptcy to Stop a Foreclosure

Don’t give up without a fight! Stop the Foreclosure!

When you have a foreclosure complaint filed against you, the clock starts ticking, and you are put into a stressful, legal world you are likely unfamiliar with.  There are procedural issues to pay attention to, such as the amount of time you have to file an Answer, and legal words used in documents you may find yourself googling to try to understand what is happening and what your rights are.

Therefore, it is no surprise how many people have and will lose their homes during this complicated process.  August showed the first increase in foreclosure auctions since the Great Recession; but don’t panic, they are still quite low in comparison to the past crisis.  Bankruptcy can be used to halt the proceedings, but the end result may be the same depending on your situation, and where you are in the process.

Once a mortgage holder obtains a Judgment of Foreclosure, the property can then be sold through a sheriff sale on a date set by the court, after which the eviction phase of the process will commence.  Some homeowners try hard to keep the house and work with the lender even after the foreclosure judgment has been obtained by the mortgage holder, trying anything and everything to save their property from being sold by the sheriff.  Many times the homeowners simply run out of time and the sale is imminent.  Most of the time, the last resort to stopping a sheriff sale is to file for bankruptcy.

Filing bankruptcy puts into place the automatic stay of 11 U.S.C. 362.  The stay is “automatic” upon filing of the bankruptcy petition, and protects the debtor against certain actions, including mortgage holders attempts to enforce a lien or judgment.  If a bankruptcy is filed before the sheriff sale takes place, it stops the sale and makes any sale that goes forward void.