Q: Does only one person (husband or wife) have to file bankruptcy to stop Trust Deed Sale?

A: The Bankruptcy Code provides an automatic stay against proceeding against the debtor/bankrupt and his property (very broadly defined by section 541 of the Code). And Chapter 13 provides a "codebtor stay", which would protect a non-filing spouse.

I'm in PA, and my practice area extends to DE, NJ, DE and sometimes MD (formerly practiced in OK and TX), so to obtain a definitive answer to your question, and many others, confer with an experienced bankruptcy attorney in California, and provide him with full facts of your financial circumstances, and your co-debtor's before your conference.

A: Yes. Only one need file.

A: In California, when facing a foreclosure signaled by a Trust Deed Sale, either spouse filing for bankruptcy can momentarily halt the sale due to the automatic stay provision. This provision immediately stops most creditors from proceeding with collection activities, including foreclosure. However, the specifics of your situation, including how the property is titled and whether both spouses are on the loan, could influence the effectiveness of a single bankruptcy filing in protecting the property.

If only one spouse is on the note secured by the trust deed, then that spouse's bankruptcy filing would generally be sufficient to stop the Trust Deed Sale temporarily. This is because the automatic stay applies to the person who files for bankruptcy and their estate, which would include the property if that person's name is on the loan. On the other hand, if both spouses are on the note, filing jointly might offer more comprehensive protection for your assets and may be necessary to fully address debts and protect from foreclosure.

It's important to consider the broader financial picture and long-term consequences of filing for bankruptcy, either individually or jointly. Consulting with a professional knowledgeable in California bankruptcy and foreclosure law can provide guidance tailored to your specific circumstances. They can help you understand the nuances of your situation and advise on the best course of action to protect your property from a Trust Deed Sale.

A: Either the husband or wife may file a bankruptcy petition to stop a deed of trust sale when husband and wife are both note holders for the mortgage, so long as the filing spouse qualifies for the bankruptcy protection through the automatic stay provided by the bankruptcy code under 11 U.S. Code § 362.

Husband and wife are not required to file jointly to stop the foreclosure. However, analysis of the filing spouse's circumstances are necessary to confirm the availability and length of the automatic stay available though bankruptcy.