IF YOU FILE 3 BANKRUPTCIES WITHIN ONE YEAR, THERE IS NO AUTOMATIC STAY AND YOU WILL NOT STOP THE FORECLOSURE
What is an Automatic Stay in Bankruptcy?
If your lender has obtained a final judgment in a foreclosure and your home has been scheduled for a sheriff sale, there are several options available to you for delaying or stopping the sale entirely. One such option is to file for bankruptcy, which is a right provided by federal law. Under most circumstances, filing for bankruptcy will grant you an “Automatic Stay.” This is an injunction that immediately halts all actions by creditors, including foreclosure proceedings and debt collection practices. While the automatic stay is in effect, your lender cannot pursue the sheriff sale.
How Long Does an Automatic Stay Last?
An automatic stay typically lasts until the bankruptcy case ends, or until a creditor makes a motion in bankruptcy Court to get “Relief from the Automatic Stay.”
- A Chapter 7 Bankruptcy usually lasts between 2-4 months.
- A Chapter 13 Bankruptcy usually lasts between three and five years.
Exceptions to the Automatic Stay
There are some scenarios where the automatic stay is limited, or not granted at all.
Filing Two Bankruptcies Within One Year
If you file for bankruptcy, then file for another bankruptcy within one year, the automatic stay will be limited to 30 days (11 U.S.C. § 362(c)(3)). The court may extend the stay if you can prove that you filed the second case in good faith.
Filing Three Bankruptcies Within One Year
If you file a third bankruptcy within one year, the automatic stay will not take effect (11 U.S.C. § 362(c)(4)). You can file a motion to the court to have the stay imposed, but again, you will need to prove that this third bankruptcy was filed in good faith.
Is Filing for Bankruptcy an Option for Me?
In order to fully understand your options concerning bankruptcy, you should seek a consultation with an experienced NJ bankruptcy attorney to determine whether it is an option for you, and what you need to do to be prepared to stop a sheriff sale. Contact the Law Firm of Ira J. Metrick today to discuss your non-bankruptcy options.