Syracuse, NY asked in Bankruptcy and Foreclosure for New York

Q: Does a 1 year stay in 7 bankruptcy, extend to foreclosure? Can a bank initiate foreclosure within 1 year of bankruptcy?

The bankruptcy is still in adversary proceeding at this time. It will probably be there for some time longer.. Does this mean the bankruptcy is still considered open? Is the stay in place until the adversary proceeding is complete?

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5 Lawyer Answers
Jonathan David Warner
Jonathan David Warner
Answered
  • Bankruptcy Lawyer
  • Albany, NY
  • Licensed in New York

A: There is nothing stopping a lender from foreclosing after a bankruptcy is Discharged or Relief from Stay is awarded beforehand. The lender cannot begin foreclosure during a Bankruptcy case before the occurrence of either hypothetical.

Otherwise, no. There is no law the avails a grace period that bars foreclosure after a bankruptcy concludes.

Timothy Denison agrees with this answer

Lloyd M. Nolan
Lloyd M. Nolan
Answered

A: The automatic stay in a Bankruptcy only exists while the case is open and the Stay is in effect. If you have been discharged in your Chapter 7 and the case is closed, there remains no protection under the automatic stay. If the creditor applied for, and was granted relief from the automatic stay, likewise the automatic stay is no longer in effect and there is no protection from foreclosure by the creditor. It is essential that you understand a discharge in bankruptcy does not eliminate a creditor's secured interest in your property where a balance remains unpaid. In other words, your discharge in bankruptcy does not "wipe out the debt" on your house because the creditor still has a secured interest by virtue of the mortgage (or deed of trust) as the case may be. The only thing that the creditor cannot do after your discharge is to pursue you personally (assuming you did not reaffirm trhe debt) for the unpaid debt beyond what is recovered by foreclosing on the property. In other words, the creditor's remedy is limited to taking "back' the property.

Timothy Denison agrees with this answer

Leonard R. Boyer
Leonard R. Boyer
Answered
  • Bankruptcy Lawyer
  • Clifton, NJ

A: When you file for Bankruptcy the automatic stay stops all litigation. If you file a Chapter 7, absent some unknown facts which may indicate otherwise the lender will make a motion to vacate the automatic stay. If you are interested in keeping the house, then you need to retain an experienced Bankruptcy attorney and file a Chapter 13 Bankruptcy.

Timothy Denison agrees with this answer

Howard E. Knispel
PREMIUM
Howard E. Knispel
Answered
  • Bankruptcy Lawyer
  • Commack, NY
  • Licensed in New York

A: As i stated when you posted this previously, there is no law that allows a person to live in their home if they are not paying the mortgage. If you filed Chapter 7 then you either intended to surrender the home or redeem (pay off the entire mortgage). Once your bankruptcy is discharged or dismissed, the automatic stay is lifted and the lender can proceed with the foreclosure directly following.

Timothy Denison agrees with this answer

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: No. Nothing precludes the lender from filing suit upon a breach.

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