If the sheriff served us a suit for foreclosure 4 days ago, would I be able to file Chapter 13 in time to save my house before they sell it?

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If the sheriff served us a suit for foreclosure 4 days ago, would I be able to file Chapter 13 in time to save my house before they sell it?

Would bankruptcy even save it?

Asked on December 22, 2014 under Bankruptcy Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

1) Yes, if you file for bankruptcy (such as Chapter 13), it will *temporarily* stop foreclosure, even at this point.

2) The "automatic stay" (the halt to collections, eviction, and/or foreclosure) is only temporary. In the case of defaulting on a mortgage, unless you start paying the mortgage and clear up any arrears in the near-to-mid-term future, and/or work out some mutually acceptable agrement with the creditor (e.g. to pay a lesser amount, which they accept), they will at some point, probably within a year, be able to go ahead with foreclosure. The bankruptcy does not eliminate their security interest, but only, as stated, temporarily stays proceedings; after a time, they will be permitted to proceed on their security interest (the mortgage) and foreclose. (They will not also be able to sue you for the amount you owe--the bankruptcy will reduce or eliminate the debt, but unless you start paying again, they will get the property itself.)


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