Days After The Case Is Filed
You have 14 days after you file your petition to file the following financial schedules with the court:
- Documents declaring your assets
- A statement of your affairs
Also, within 14 days after you file your case, the court will mail the Notice of Commencement of Case to you and all of the creditors listed in the petition. This notice will give the date for the meeting of creditors, and the deadlines for the creditors to object to the case and file their claims against you.
An Automatic Stay Will Stop Debt Collection
Filing for bankruptcy will trigger the automatic stay. The automatic stay will ensure that creditors will not try to collect from you while your case is pending. What this means is they can’t contact you to collect on debts like credit card debts and other types of unsecured debts. The automatic stay will also stop the garnishment of your wages.
What Happens To Your Home
If you own your home it can be sold if it is the only way to pay your creditors.
If youre the only owner of the property:
- the value of the property after any secured debts have been paid transfers to the trustee. This is known as the beneficial interest and is sometimes called equity
- the legal title transfers to the trustee and a bankruptcy restriction is added to the land registry record. This will stop you from selling your home or making deals connected to it
The restriction will be removed once the trustee has been paid for their interest in the property.
If you own the property with someone else:
- your share of the property after any secured debts have been paid transfers to your trustee. This is known as the beneficial interest
- a Form J restriction is added to your Land Registry record and the trustee will be told of any deals affecting the property, including a sale
You can still sell the property, but the trustee will get your share of the money from the sale. The Form J restriction will be removed once the trustee has been paid this money.
The sale of your home
The trustee cannot usually sell the property without your agreement for a year from the date of the bankruptcy order if you have a partner or children living with you.
You can stop a sale taking place later if a family member or friend buys the beneficial interest in your home. The buyer should contact the trustee.
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What Bankruptcy Can Do
Bankruptcy allows people struggling with debt to wipe out certain obligations and get a fresh start. The two primary bankruptcy types filedChapter 7 and Chapter 13 bankruptcyeach offer different benefits and, in some cases, treat debt and property differently, too. You’ll choose the chapter that’s right for you depending on your income, property, and goals.
Here are some of the things you can expect regardless of whether you file for Chapter 7 or 13.
What Is Discharge In Bankruptcy
A bankruptcy discharge refers to the order of the bankruptcy court, issued at the end of a bankruptcy proceeding, which releases a debtor from personal liability for certain types of debts . A debtor who successfully completes a bankruptcy proceeding cannot be legally required to pay any debts subject to the bankruptcy discharge.
Any creditor holding those debts cannot take any legal action to collect those debts and cannot communicate with the debtor regarding those debts. Most unsecured debts fall under a bankruptcy discharge order.
In Chapter 7, the bankruptcy court will issue the discharge at the end of the time period for creditors or other interested parties to file an objection to the discharge or to the bankruptcy petition, usually about three to four months after the initial filing of the bankruptcy petition. Occasionally the discharge is delayed past that time frame. In individual Chapter 11 bankruptcies and in Chapter 13 bankruptcies, the court will grant discharge upon satisfaction of the repayment plan, which generally lasts anywhere between three and five years.
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How To Stop Foreclosure Sale Date
If you have missed three or more mortgage payments, you are likely facing foreclosure. Even if your lender has filed a Notice of Default, you have several options to help you avoid foreclosure.
- Short sale A short sale refers to selling your home for less than the amount owed on your mortgage. You might be able to work out a short sale option with your mortgage lender if they have not yet scheduled an auction. Many banks are willing to agree to short sales as this saves them the time of effort of auctioning off your home.
- Bankruptcy If you file bankruptcy, your mortgage company must immediately stop all collection efforts, including foreclosure. Your lender will need to obtain a court order to resume foreclosure proceedings once you file bankruptcy. You might be able to delay or even prevent the loss of your home with bankruptcy.
- Talk to a foreclosure attorney A foreclosure attorney can provide you with alternatives to foreclosure. For instance, they might be able to help you work out a deal with the lender to save your home. They can also help you fight the foreclosure in court or help you modify your loan.
What Is A Chapter 7
Chapter 7 is known as straight bankruptcy or liquidation. In a Chapter 7, a list of all of your assets and debts is filed with the bankruptcy court. The court will appoint a trustee to represent the interests of your creditors and can sell your property to pay debts. In most Chapter 7 cases, however, your property will be exempt by law, and cant be sold to satisfy creditors claims. When your chapter 7 case is over , most of your debts will be erased. If you filed under Chapter 7 and your debts were discharged, you must wait 8 years before filing another Chapter 7.
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What Is Dismissal In Bankruptcy
A dismissal in bankruptcy means that the bankruptcy court has stopped all proceedings in the main bankruptcy case and in all adversary proceedings related to the bankruptcy case and that the bankruptcy court has not entered a discharge order in the case.
A bankruptcy court may choose to order dismissal of a case on its own, such as when the debtor commits misconduct in connection with the bankruptcy proceeding , or if the judge deems the filing abusive.
The bankruptcy trustee, the US Bankruptcy Administrator, or a creditor may file a motion for dismissal of a bankruptcy case. Occasionally a Motion to Dismiss may seek a bar to refiling for a period of time.
A debtor may file a motion to voluntarily dismiss their bankruptcy case, which the bankruptcy court may grant if it finds the debtor meets the requirements for voluntary dismissal. However, voluntarily dismissing your own bankruptcy case can negatively impact your options for filing for bankruptcy in the future or the right to an automatic stay in a future bankruptcy case.
Consequences For Failing To Report An Income Increase
If your income has grown, for whatever reason, do not be tempted to hide it from the bankruptcy court. You may think the change is not much and that you can safely pocket it. However, the change may be enough to alter your payment schedule or eligibility for a Chapter 7 proceeding. If you fail to report an income increase, your bankruptcy case could be dismissed and you would be back to being overwhelmed with your debt. Your creditors would have the right to demand payment on their own schedule and now the courtâs payment plan.
In some cases, you could be charged with bankruptcy fraud, which is a criminal offense. It could lead to fines and imprisonment.
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What Bankruptcy Can’t Do
Bankruptcy doesn’t cure all debt problems. Here’s what it can’t do for you.
Prevent a secured creditor from foreclosing or repossessing property you can’t afford. A bankruptcy discharge eliminates debts, but it doesn’t eliminate liens. A lien allows the lender to take property, sell it at auction, and apply the proceeds to a loan balance. The lien stays on the property until the debt gets paid. If you have a secured debta debt where the creditor has a lien on your propertybankruptcy can eliminate your obligation to pay the debt. However, it won’t take the lien off the propertythe creditor can still recover the collateral. For example, if you file for Chapter 7, you can wipe out a home mortgage. But the lender’s lien will remain on the home. As long as the mortgage remains unpaid, the lender can exercise its lien rights to foreclose on the house once the automatic stay lifts.
Eliminate child support and alimony obligations. Child support and alimony obligations survive bankruptcy, so you’ll continue to owe these debts in full, just as if you had never filed for bankruptcy. And if you use Chapter 13, you’ll have to pay these debts in full through your plan.
Eliminate most tax debts. Eliminating tax debt in bankruptcy isn’t easy, but it’s sometimes possible for older unpaid tax debts. Learn what’s needed to eliminate tax debts in bankruptcy.
Eliminate other nondischargeable debts. The following debts aren’t dischargeable under either chapter:
How Long Does It Take For A Bank To Foreclose On Your Home
The length of time that it takes a bank to foreclosure on your property depends on many factors, including state law. Foreclosure works differently in different states. Some states have what is called a non-judicial foreclosure while others have a judicial foreclosure. A judicial foreclosure goes through court and takes longer than a non-judicial foreclosure. So, the process of foreclosure can vary widely from state to state. Here is the timeline:
- Three months or more behind A bank issues a Notice of Default. It is a notice telling you that you are violating the terms of your mortgage. This is the first step in the foreclosure process.
- Notice of Sale If you still do not cure the default, the mortgage company will send you a notice of sale. This tells you the date that the foreclosure will take place.
- Foreclosure Sale Finally, your home will be sold at an auction.
Even if your bank has issued a Notice of Sale, you can still halt the foreclosure process. However, it is best to seek the advice of an experienced foreclosure attorney for guidance.
What Affects The Chapter 7 Bankruptcy Process
There are a lot of things that can affect how long Chapter 7 bankruptcy takes, some including court delays in the aftermath of the COVID-19 pandemic. But the biggest factor on how long your Chapter 7 bankruptcy case will take is you.
Cibik said things that commonly slow the process down include tardiness or noncompliance in getting the proper documentation to the trustee, as well as objection to discharge by creditors, too much income, excess equity in real estate, a pending inheritance, or outstanding lawsuit where the debtor is the plaintiff. Thats just to name a few things that could go wrong, he said.
Lyle Solomon, a bankruptcy attorney of Oak View Law Group in Sacramento, Calif, said the fact bankruptcy is complicated can cause issues. There is a lot of paperwork, things need to be filed in a timely and complete manner, he said. There are generally two things that can slow the process from the petitioners side: The speed at which they get me all of the information correctly if I dont have everything in time, this can force a rescheduling, which is typically a month or so. Also, the more assets you have slows things down, the courts have to assess your property and what should be sold and what should be kept. This can take months.
He said the worst delay is if a creditor doesnt believe the person filing should be eligible and files a lawsuit. This can delay your case by a year or more, Solomon said.
Can Bankruptcy Save You From Foreclosure
Bankruptcy can help save homes from foreclosure in several ways. Under current law, filing a Chapter 7 or 13 bankruptcy petition will stop foreclosure, but you’ll have to sort out your mortgage somehow. Chapter 7 is a temporary restriction on foreclosure, but it may leave you little time to sell or refinance your property.
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What Happens After Filing
Once youve filed, you get immediate relief from all collection calls, and interest immediately stops building on your debts. But beyond that, bankruptcy gives you an opportunity to start fresh, financially speaking. Our bankruptcy trustees work with you to help you create effective money-management skills and habits, all while monitoring your income and expenses to determine appropriate fees for your trustee. Your bankruptcy length is typically determined by your income and whether or not youve been bankrupt before.
Still Have Questions Speak To A Bankruptcy Attorney
Bankruptcy gives you a fresh start. But you need to have extensive knowledge of the bankruptcy laws and procedures if you are thinking of filing your bankruptcy petition without an attorney. As bankruptcy has a range of long-lasting consequences, it may be best to speak to a bankruptcy lawyer to guide you based on your particular situation.
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Can You Stop Foreclosure Once It Starts
The biggest thing when facing foreclosure is knowing what to do. Many people are in an economic crunch with loss of job and income. The loss seems to be causing many other problems and the biggest problem occurs when youre faced with foreclosure. When youre faced with foreclosure, there are steps that you should take before youre evicted. You might be able to save your home if you act immediately.
Most people are afraid to challenge the banks and lending institutions. This is a big mistake because banks are now being challenged by the Attorney General of the state because of the fraud that they have done to process foreclosure on properties. Families are now getting a new face in government to help them face foreclosure. Getting home foreclosure help is easier than it has ever been in the past. The best thing to do when youre faced with foreclosure is to use a foreclosure lawyer to help you. People have many questions when it comes to foreclosure concerning what to do to save their home.
How To Save Your Home From Foreclosure
- 1. Make your mortgage payment your top priority. Lenders can generally initiate foreclosure after three to five months of late payments.
- 2. Change your standard of living. Calculate your monthly expenses and find areas where you can save.
- 3. Get help managing your finances. You can take advantage of credit advice or a debt management program that includes housing advice. Tutor
- 4. Know your rights. Consult with a lawyer about your rights in the event of foreclosure. There are two types of bankruptcies. if you have
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The Risks Of Bankruptcy
A decision to file for bankruptcy is not something to choose lightly. Filing for bankruptcy carries several risks the chiefest of which, it can affect your credit and ability to qualify for financing and buy things for years to come. Thats why its important to hire the right attorney in your corner to stop foreclosure now especially if you receive a foreclosure summons. Learn more about response to foreclosure summons and ways to stop foreclosure immediately by contacting one of our experienced attorneys for a free consultation.
What Are A Tenant’s Rights During A Foreclosure
In most cases, new owners must notify tenants at least 90 days before vacating the property under the Tenant Forclosure Act. Before the law was passed, tenants could be evicted a few days after the . However, if the tenant is “in good faith”, he may be entitled to stay until the end of the lease.
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How Do I Stop A Wage Garnishment By Making A Deal With My Creditor
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If a creditor has already gone to court and obtained a garnishee summons allowing them to garnishee your wages, the wage garnishment will only stop once it is paid, or if the creditor agrees to stop it.
You can attempt to make a deal with the creditor. Here are two ways you can do this.
What Happens To Your Bank Account
When the bankruptcy order is made, you must:
- make sure you do not use your bank account
- give your cards and cheque books to the trustee
Your bank account will be frozen. Any money in your account will be an asset and claimed by the trustee. The trustee can ask to release some money:
- for your daily living needs
- to the other person in a joint account
The bank is allowed to use money from one of your accounts to pay your debts on another account you hold with them. This is called set off.
Otherwise, money owed to the bank is a bankruptcy debt, so you cannot pay this to the bank directly. The exception is if the bank has a charge on your home .
Open a new account
You can open a new bank account after the date of the bankruptcy order but you must tell the bank or building society that youre bankrupt. Some banks will let you use your old account after theyve spoken to the trustee.
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