Many people faced with an imminent foreclosure related sheriff’s sale seriously consider filing for bankruptcy. In this type of situation bankruptcy may be an attractive option because a bankruptcy filing delays a foreclose. However, it is important to note that this delay is only temporary.
A bankruptcy has the benefit of this delay because immediately following a bankruptcy filing the Bankruptcy Court issues a court order referred to as an automatic stay. This automatic stay simultaneously notifies the creditors of the party that has filed bankruptcy of the existence of the bankruptcy case and orders these creditors to immediately stop pursuing all collections related activities including a foreclosure itself. This could have the benefit of delaying a previously scheduled sheriff’s sale while the bankruptcy case is pending, which is often three to four months.
While a bankruptcy temporarily delays sheriff’s sales, the bankruptcy is itself only a very temporary solution to a struggling homeowner’s problems. Not only is this brief delay limited to the period in which the bankruptcy is pending, but the homeowner’s lender may in certain situations be able file a motion with the Bankruptcy Court to lift the stay. If granted and the stay is lifted, the lender can proceed to sell the home.
If you are interested in filing a Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.