Monday, March 30, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Does filing bankruptcy keep a home out of foreclosure sale?

By
From page C3 | September 29, 2012 |

Q:  I came home from work yesterday to find a paper taped on our front door. It says the house will be sold at a foreclosure sale in Vallejo in about three weeks. Friends have told us that we can save our home by filing bankruptcy. Is that true? Is that something you advise people to do?

A:  First, no I don’t advise people to file for bankruptcy, at least not without talking with a bankruptcy attorney first.

My expertise is in real estate. Six years ago, I knew next to nothing about bankruptcy. But, tragically, the events over the past four to five years have made it necessary for anyone dealing with real estate law to become knowledgeable about bankruptcy, since real estate issues are without doubt the leading cause of bankruptcies nowadays.

First, you have to understand what bankruptcy is, and what it isn’t.

We all know that bankruptcy is designed for someone who has more monthly bills than they can pay. We also know that bankruptcy can eliminate many of those debts, leaving them unpaid and the debtor off of the hook.

But it’s commonly believed by those considering bankruptcy that it’s a type of smorgasbord in which you can decide what bills you want to get rid of and which you’re willing to keep.

The truth is that the minute your attorney pushes the “send” button on his or her computer, everything you own, right down to your underwear, isn’t owned by you anymore. At least, from a practical perspective, that’s temporarily true.

Within 24 hours of filing for bankruptcy protection, a bankruptcy trustee will be appointed by the court to take legal possession of everything you own.

That doesn’t mean a truck pulls up to haul away your stuff. But the trustee now has the ability to analyze everything you own and try to figure out what, if anything, the law will permit him to seize and sell in order to help pay your creditors.

Of course, the reality is that most people who file for bankruptcy don’t have anything a good bankruptcy lawyer can’t protect. But still, that’s the technical way it works.

So your house will be in play, whether or not you want it to be.

If you have equity in your home, the trustee will be interested in investigating further to see if they can take the house and sell it. That determination is based upon technical law and beyond the scope of this column.

But let’s assume you have no equity.

The very act of filing for bankruptcy is considered a breach of the terms of your mortgage.

When the economy was normal, you could bet the bank would get the court’s permission to foreclose as quickly as possible.

Fast forward to today. Most banks aren’t interest in foreclosing upon any property that the owner is willing to keep making payments on.

So here’s where it gets interesting.

If you go through a Chapter 7 bankruptcy, any liability you had for the mortgage will disappear. But if you are willing to make payments, the bank may be more than happy to let you stay in the house and hopefully refinance or pay it off some day.

Sometimes they’re even willing to talk about a loan modification.

But to get to your question directly; yes, your bankruptcy will at least delay the foreclosure.

The very moment you file for bankruptcy there is something called an “automatic stay” that goes into place. The stay is a legal order from the court stopping any and all collection actions against you. That includes foreclosures.

In fact, all phone calls and nasty letters from any creditors will cease.

But if you can’t work out a deal with the bank, your mortgage holder will likely simply wait until you received a “discharge of debts” at the end of your bankruptcy and then complete the foreclosure.

So, at a minimum, a bankruptcy will buy you some time.

At best, you come out of the bankruptcy with some deal with the bank that will let you make payments and stay.

At worse, you lose the house six months from now.

Believe me when I tell you that all of this is nothing but a quick flyover of Chapter 7 bankruptcy law.

If bankruptcy is something you wish to consider you need to get in and see a bankruptcy attorney in the next two weeks, before the sale.

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like answered in this column you can contact him at [email protected]

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Easter activities, events abundant

By Susan Hiland | From Page: A1 | Gallery

 
Christians begin Holy Week with Palm Sunday celebrations

By Amy Maginnis-Honey | From Page: A1, 1 Comment | Gallery

2 drivers killed in same area, an hour apart

By Amy Maginnis-Honey | From Page: A1, 5 Comments

 
My guide to dining out

By Tony Wade | From Page: A2, 4 Comments

Local governments post week’s meeting times

By Susan Hiland | From Page: A3

 
Top young spellers to compete for Solano title

By Glen Faison | From Page: A3

Police investigate shooting off North Texas Street

By Amy Maginnis-Honey | From Page: A3, 7 Comments | Gallery

 
Vallejo police seek leads in weekend homicide

By Amy Maginnis-Honey | From Page: A3

Biz Buzz: Re/Max hires new Realtor

By Susan Hiland | From Page: A10

 
Biz Buzz: PAL receives donation from glass company

By Susan Hiland | From Page: A10 | Gallery

 
Biz Buzz: Wiseman officer names Perez to key post

By Kevin W. Green | From Page: A10

.

US / World

 
Analysis finds unequal pay for women on California Capitol

By The Associated Press | From Page: A3

Songwriter injured in California crash; motorcyclist killed

By The Associated Press | From Page: A3

 
Taylor Swift wins artist of the year at iHeartRadio Awards

By The Associated Press | From Page: A4

 
Police: 2 bodies found in NYC building explosion rubble

By The Associated Press | From Page: A5

 
Waving fronds around the world, Christians mark Palm Sunday

By The Associated Press | From Page: A7

 
Air Canada plane makes hard landing short of Halifax runway

By The Associated Press | From Page: A7

Small tsunami generated in Pacific after earthquake

By The Associated Press | From Page: A9

 
.

Living

Community Calendar: March 30, 2015

By Susan Hiland | From Page: A2

 
Today in History: March 30, 2015

By The Associated Press | From Page: A2

Horoscopes: March 30, 2015

By Holiday Mathis | From Page: B6

 
Parenting: If a father is abusive, a mother must act

By The Washington Post | From Page: B8

 
Horoscopes: March 31, 2015

By Holiday Mathis | From Page: B8

.

Entertainment

TVGrid March 30

By Daily Republic Syndicated Content | From Page: A10

 
TVGrid March 31

By Daily Republic Syndicated Content | From Page: A11

Michelle Obama declares ‘Black Girls Rock!’

By The Associated Press | From Page: A11, 3 Comments

 
.

Sports

Spartans Final Four-bound after 76-70 OT win over Louisville

By The Associated Press | From Page: B1

 
Duke back in Final Four after 66-52 win over Gonzaga

By The Associated Press | From Page: B1

 
Hamlin wins for 25th time, and fifth time at Martinsville

By The Associated Press | From Page: B2

Jimmy Walker wins hometown Texas Open

By The Associated Press | From Page: B2

 
Oakland OF Josh Reddick won’t be ready for start of season

By The Associated Press | From Page: B2

California Chrome heads to Britain, to race at Royal Ascot

By The Associated Press | From Page: B2

 
Vettel wins Malaysian GP to end Mercedes streak

By The Associated Press | From Page: B2

Joe Gibbs on son: most courageous person I’ve been around

By The Associated Press | From Page: B2

 
Chodounsky defends slalom title at US Alpine Championships

By The Associated Press | From Page: B2

South Carolina earns 1st Final Four berth, beats FSU 80-74

By The Associated Press | From Page: B2

 
Turner says Saturday regional finals highest-rated in decade

By The Associated Press | From Page: B2

Apology for wrong anthem for El Salvador before game in US

By The Associated Press | From Page: B2

 
Montoya holds off Power to give Penske 1-2 sweep at St. Pete

By The Associated Press | From Page: B2

Stanford’s Randle chases school scoring record, title at NIT

By The Associated Press | From Page: B2

 
Hamlin wins for 25th time, and fifth time at Martinsville

By The Associated Press | From Page: B2

Cain goes 4 innings in Giants win over LA

By The Associated Press | From Page: B3

 
Graveman pitches into 7th inning as A’s beat Brewers 7-0

By The Associated Press | From Page: B3

.

Business

.

Obituaries

Robert Roberts

By Nancy Green | From Page: A4

 
Janice Jewel Thompson

By Nancy Green | From Page: A4

.

Comics

Peanuts March 30

By Daily Republic Syndicated Content | From Page: B5

 
Zits March 30

By Daily Republic Syndicated Content | From Page: B5

Blondie March 30

By Daily Republic Syndicated Content | From Page: B5

 
Pickles March 30

By Daily Republic Syndicated Content | From Page: B5

Get Fuzzy March 30

By Daily Republic Syndicated Content | From Page: B5

 
Sally Forth March 30

By Daily Republic Syndicated Content | From Page: B5

For Better or Worse March 30

By Daily Republic Syndicated Content | From Page: B5

 
Baldo March 30

By Daily Republic Syndicated Content | From Page: B5

Garfield March 30

By Daily Republic Syndicated Content | From Page: B5

 
Dilbert March 30

By Daily Republic Syndicated Content | From Page: B5

Baby Blues March 30

By Daily Republic Syndicated Content | From Page: B5

 
Frank and Ernest March 30

By Daily Republic Syndicated Content | From Page: B5

B.C. March 30

By Daily Republic Syndicated Content | From Page: B5

 
Wizard of Id March 30

By Daily Republic Syndicated Content | From Page: B5

Beetle Bailey March 30

By Daily Republic Syndicated Content | From Page: B5

 
Rose is Rose March 30

By Daily Republic Syndicated Content | From Page: B5

Sudoku March 30

By Daily Republic Syndicated Content | From Page: B6

 
Bridge March 30

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth March 30

By Daily Republic Syndicated Content | From Page: B6

 
Crossword March 30

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote March 30

By Daily Republic Syndicated Content | From Page: B6

 
B.C. March 31

By Daily Republic Syndicated Content | From Page: B7

Blondie March 31

By Daily Republic Syndicated Content | From Page: B7

 
Peanuts March 31

By Daily Republic Syndicated Content | From Page: B7

Baldo March 31

By Daily Republic Syndicated Content | From Page: B7

 
Rose is Rose March 31

By Daily Republic Syndicated Content | From Page: B7

Beetle Bailey March 31

By Daily Republic Syndicated Content | From Page: B7

 
For Better or Worse March 31

By Daily Republic Syndicated Content | From Page: B7

Dilbert March 31

By Daily Republic Syndicated Content | From Page: B7

 
Garfield March 31

By Daily Republic Syndicated Content | From Page: B7

Pickles March 31

By Daily Republic Syndicated Content | From Page: B7

 
Zits March 31

By Daily Republic Syndicated Content | From Page: B7

Sally Forth March 31

By Daily Republic Syndicated Content | From Page: B7

 
Get Fuzzy March 31

By Daily Republic Syndicated Content | From Page: B7

Wizard of Id March 31

By Daily Republic Syndicated Content | From Page: B7

 
Baby Blues March 31

By Daily Republic Syndicated Content | From Page: B7

Frank and Ernest March 31

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth March 31

By Daily Republic Syndicated Content | From Page: B8

Bridge March 31

By Daily Republic Syndicated Content | From Page: B8

 
Sudoku March 31

By Daily Republic Syndicated Content | From Page: B8

Cryptoquote March 31

By Daily Republic Syndicated Content | From Page: B8

 
Crossword March 31

By Daily Republic Syndicated Content | From Page: B8