Friday, September 21, 2012

Can a bank foreclose on your property after bankruptcy?

Can a bank foreclose on your property after bankruptcy?
King and King Bankruptcy 9/21/2012

It’s true in most cases that bankruptcy filing will stop a foreclosure, as long as a foreclosure sale has not taken place. However, many debtors wonder if their bank can come back after the bankruptcy case is closed and initiate foreclosure proceedings once again. Let’s take a closer look at this question.

Fact: the automatic stay imposed through a bankruptcy filing buys a debtor time in which to review and reorganize all of their debts. No collection efforts may take place while the stay is in effect, and that includes foreclosure proceedings. However, in some cases a lender may petition the court to have the stay lifted so that it may reinstate a foreclosure where it left off in order to take the property back.

In order to lift the stay, the lender must show that the homeowner is not current on the mortgage payments.  As long as you stay current on your mortgage payments and property taxes while in bankruptcy, you are not at risk.

Nevertheless, the lender may wait until the bankruptcy case is closed to start (or continue) foreclosure proceedings. If a debtor falls behind on payments after a bankruptcy is concluded, a lender may initiate foreclosure proceedings on the property.

If you have questions about whether a bankruptcy would be appropriate to save your home from foreclosure, an experienced attorney can advise you. Call King and King in Atlanta, Georgia for a free consultation today--404-524-6400.