Lifting the automatic stay in chapter 7

  • Thread starter Your mileage may vary
  • Start date

Y

Your mileage may vary

Like many others in this forum, I need to learn a bit about filing for
bankruptcy - at least enough to evaluate attorneys and anticipate the
results of filing. My thanks to Brett and Tom and others who have
shared their expertise and experiences.

My wife and I operate a small business out of our home. Over the past
two years, many of our clients became slow pay, and we've used lines
of credit to keep things afloat while seeking additional clientele.
About 9 months ago we lost a large account (45% of our business) . . .

We'd like to stay in our house of 20 years, but we're nearly 90 days
past due with our mortgage. Will the automatic stay provide any
significant delay in the bank initiating foreclosure? In an ideal
world, we'd file Chapter 7 and would have a bit of time to save money
while the bank gets the automatic stay lifted, or waits for the
Chapter 7 discharge. Since I'm in my ideal world, the bank wouldn't
add any additional fees or penalties while the stay is in place.

Any clues as to what to expect from the real world? I understand that
Chapter 13 provides restructuring, but our fluctuating income isn't a
good foundation for a 36 month, rigorously supervised repayment plan -
and I'm concerned that we'll end up among the 70% who fail in Chapter
13.

Thanks -
 
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H

Howard Goldstein

: Will the automatic stay provide any
: significant delay in the bank initiating foreclosure?

No, I wouldn't count on any meaningful delay, at least not in my
district. But you're a googler and heaven knows where you are. YMMV.
 
R

Robert

Will the automatic stay provide any
significant delay in the bank initiating foreclosure?
I will tell you my real world experience: Absolutely it will. They
can't foreclose until they get a lift to the automatic stay...now, it
is certainly possible the judge will lift the stay (depending on the
situation...especially in a Chapter 7 you'll have to get caught up on
those payments)...

but as for me...I didn't want my house in my bankruptcy. I actually
moved out after filing...I had no choice...I was in such dire shape I
couldn't even afford to drive from my home to work anymore...

so I packed up, moved to an apartment in town, walked to work...well,
you get the idea, even with my house completely vacant it took them
four months to get possession. Filed in early July, the stay was
lifted in November.

Usually, when they have to foreclose on someone, it takes many
months...I've heard in some cases even a lot longer.

My feeling, is the bank has some legal maneuvering available to it,
but they probably want you to keep the house, after all, post
bankruptcy you'll have less debts and therefore a greater ability to
pay for the mortgage....they just want their money, after all, and I
know lots of people who survived bankruptcy with their house...but, of
course, that depends on your individual situation.
 
Y

Your mileage may vary

Hi Robert -

Thanks for sharing. Since posting, I talked with a couple of
bankruptcy attorneys, and they've given different answers to that
question. One said they would probably have the stay lifted in a
couple of weeks, and a second indicated they would probably not bother
lifting it - they'd just wait until the case was discharged.

Stay tuned -
 
F

Frank

When I did a Chapter 7 in the past (in New Jersey), I had two properties --
one was my primary residence with some equity and the other was my secondary
residence with little or no equity. The mortgage company for the primary
residence got the automatic stay lifted within about 60 days. The other
mortgage company didn't do anything and never even foreclosed until long
after the Chapter 7 discharge.

Once the automatic stay was lifted on my primary residence mortgage, I was
able to keep making payments on that mortgage and brought the mortgage
current. That prevented foreclosure on that property, which I wanted to
keep. I was able to make the payments because I didn't have to pay any of
my other unsecured debts which were going to be discharged in the Chapter 7.

Another option would be, if you can stall the foreclosure until after the
Chapter 7 discharge, you can then immediately do a Chapter 13 to keep the
property.

My case was in New Jersey where I elected the federal exemptions. My
primary residence had less than the federal exemption limit in equity. That
is an issue you will need to figure out if you want to keep your property.

Good luck.
 
Y

Your mileage may vary

Frank -

Thanks for your input. Our income isn't sufficient to make a viable
Chapter 13 filing - but it is growing. We're filing for Chapter 7, and
hoping to get the mortgage caught up (and keep it current).

Onward -
 
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F

Frank

One thing you might want to think about is how much equity you have in your
house right now, and what the homestead exemption is for the state where you
are filing.

When I did my bankruptcy in the past, I first had to purposely let the 1st
and 2nd mortgage get behind on the property I wanted to keep -- before I
filed for bankruptcy. The reason why I did that was to temporarily increase
the amount due on the mortgages so the amount of equity in the property
would be below the homestead exemption. Then, after I filed, I was able to
gradually bring those mortgages current. In other words, it might turn out
to be to your advantage that your mortgage is a few months behind on the
date when you actually file the Chapter 7.

But it sounds like you are already doing all of the right things such as
going to bankruptcy attorneys before doing anything.
 
A

advocate

That is a very sophisticated approach to Bankruptcy. It is called
Exemption planning and it is completely legitimate.

You have to be very careful these days, especially in New York which
only has a $10,000 homestead exemption.

The Real Estate Market is so hot, that some Trustees are actually
selling the property if there is excess equity.

You should take full advantage of the Bankruptcy Laws.

Best of luck to you.

Jacob

http://www.silverbankruptcy.com
 
F

Frank

advocate said:
That is a very sophisticated approach to Bankruptcy. It is called
Exemption planning and it is completely legitimate.
Thanks. I learned about it from a book called How To File For Bankruptcy
(Nolo Press, http://www.nolo.com ). I bought the book and read it just to
get an idea of all of my options, and I learned a lot. I even considered
moving to a more favorable state such as Florida or Texas, but that didn't
make sense in my case. I did learn that there is a lot more to bankruptcy
than most people realize.
 
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J

jimbol51

Has anybody dealt with JK Harris in regards to tax resolution issues? Is
this a reputable outfit? Thank, Jim
 

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