Generally, yes. Filing for bankruptcy does stop a foreclosure proceeding, But it’s not, the end of the foreclosure progression.
11 U.S.C. §362 of the Bankruptcy Code is naturally stated to as the “automatic stay”. A ton of bankruptcy filings in New York and on Long Island make full use of the automatic stay. The entire thing as follows:
A personal is currently being sued by a debt collector. Even though most of us are way more worried with a “foreclosure” than a tiny claims action the two lawsuits do come down to a debt collector suing an individual. The personal may not be equipped for the law suit, and may not understand the consequences of the lawsuit or may even be trying to evade the lawsuit. So, now, the individual gets a letter proclaiming that the debt collector is going to demand for a “default judgment” that may take their bank account, their pay or even their home. Rather than losing properties that may be frightening to the people entangled, they can file a bankruptcy and accomplish the “automatic stay”.
So, in the growth of a foreclosure preparation an individual may file bankruptcy under Chapter 7 and the action will be stationary or motionless. The mortgage does not go away, the lawsuit doesn’t fade, but the person is given a “breaking” period with which to strategize a method. The legal team at NYBankruptcy.com will plan out a technique specifically designed to your financial condition.
Once your Chapter 7 bankruptcy is filed you will have a clear observation of the material in front of you. The income that was about to pay debts may now be use as income that can be used on your mortgage. Income executions or “garnishments” may be eliminate. In fact, the Court, itself, may influence an adjustment of your mortgage.
It’s serious to recollect that the lawsuit is not established. The bank will maybe, move the Court to “lift” or terminate the automatic stay. If it occurs, the bank can carry on the foreclosure lawsuit. Nonetheless, the personal will have a chance to talk and, perhaps, patch-up the issue in the bankruptcy filing. Outside of a foreclosure it’s rare that a creditor will follow to lift the stay. Most of the time once a lawsuit is at a conclusion it is likely finished for good. Remember, each case changes.
As with any circumstances, there are guidelines that must be followed before a Chapter 7 may be filed. The legal team at NYBankruyptcy.com comprehends the meaning of the individual and the details of each and every problem.
We understand the fear that comes with being sued. But the worst possible approach is to pretend that nothing is happening. You have rights. NYBankruptcy.com knows and will explain your rights. Call NYBankruptcy.com today for a free consultation.