Upon the filing chapter 7 petition, an injunction is automatically imposed called the “automatic stay “. The automatic stay immediately stops all collection actions against the debtor or the debtor’s property. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors may not initiate or continue lawsuits, wage garnishments, bank restrains or even telephone calls and debt collection letters demanding payment.
In order for the bank to seek foreclosure after chapter 7 petition has been filed, the bank must file a motion with the bankruptcy court seeking relief from the automatic stay. Once a relief order is entered by the bankruptcy court, the bank can go back to state court to resume the foreclosure.
Filing a chapter 7 bankruptcy case provides a debtor facing foreclosure with some extra time to negotiate a mortgage modification or other settlement with the bank. Also, by discharging all of the debtor’s unsecure debt, the debtor’s financial condition improves making it easier to repay the bank and stop foreclosure.
If you have questions or concerns about how to stop foreclosure through bankruptcy, we urge you to contact The Law Offices of Robert J. Nahoum, P.C. today by calling 845-232-0202.
This Law Offices of Robert J. Nahoum, P.C. is a Debt Relief Agency. We assist individuals to become debt free through Bankruptcy.