What to do about a delinquent mortgage and bankruptcy?

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What to do about a delinquent mortgage and bankruptcy?

I have a mortgage on my residence. It has no equity and the mortgage is several months delinquent, although it is not presently in foreclosure. If I now file a Chapter 7, would the mortgage lender be required to obtain a court order for relief from the automatic stay before filing a notice of default to start the foreclosure process?

Asked on August 7, 2013 under Bankruptcy Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes, your lender woud have to get relief from the "automatic stay" via a court order. This stay is the mechanism by which all collection efforts against a debtor must be halted as a matter of law. However, while theautomatic stay will slow down the foreclosure process it will not ultimately stop it.

In some cases, a  lender will wait until the bankruptcy case is closed to start/continue the foreclosure process. In other cases, the lender will not want to wait that long and so will file the appropriate paperwork with the bankruptcy court to allow it to take the property out of bankruptcy protection.

At this point, you really should consult directly with a bankruptcy attorney as to your situation.


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