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Can your bankruptcy stop the foreclosure process?
Yes, it can but for short-term and assuming it is not your third bankruptcy case within a year. We do not suggest to use it only for stopping foreclosure unless there are other accompanied issues associated with foreclosure.
The court would frown on you if you continuously file bankruptcy for the sole purposes of getting an automatic stay only. As you may know, when you file bankruptcy, an automatic stay ordinarily comes into effect by operation of law and stops all the imminent foreclosure. Once I had to file a bankruptcy only an hour before the auction time, and we had to rush to give the copy to the auctioneer in their office on 4th street in downtown Las Vegas. I would not hesitate to tell you that I avoided an imminent accident also in my haste to reach on time and stop the imminent foreclosure. I learnt to drive carefully now. We just managed to beat the traffic and went to the office only five minutes before the fall of the hammer.
In chapter 7 cases, an automatic stay can prolong the foreclosure process. Sometime, it last longer than 30 days, or indefinite in case of the filing of an adversary proceedings by the debtor on some wrongful foreclosure matters likes the stronger violations under both TILA and RESPA or some deceptive trade practices. However, sooner this automatic stay is lifted, your lender may come back and try to foreclose your home. These are guerilla tactics and you should be aware of them. Remember, once the lender has fulfilled the Nevada notice requirements, they do not have to repeat it again after the filing of bankruptcy.
In Chapter 13 cases, the debtor or the homeowners might be able to cure the defaults on the mortgage under the plan and keep up an ongoing payments. This may ultimately cure the default on the mortgage and during this process the lender cannot foreclose his/her home. Bankruptcy is afterall an effective way to buy more time during the foreclosure and default proceedings and negotiate with your lender for loan modification
What is the right of redemption in chapter 7?
The Code also provides that for certain secured consumer debts the security interest may be eliminated upon payment to the creditor of the value of its collateral. The purpose of this section is to avoid creditors taking an unfair advantage of the debtor’s situation. The redemption provision provides a simple procedure, within the chapter 7 case, for the debtor ro remove a creditor’s lien by paying the creditor the real value of the property. This is available to only individual debtor and only with respect to certain property and certain debts.