Legal Question in Bankruptcy in California

Re: Bankruptcy Chapter 7

The mortgage does not get discharged because it is secured debt, secured by the property. Assuming the property had no equity, the bankruptcy stay was removed for that reason, and assuming there is no notice of appeal filed, then the lender is free to move based on the statutory forclosure scheme in California. The problem however is whether there was a second mortgage holder (non purchase mortgage such as a home equity loan) which is now free to sue in a state court for a deficiency, and whether the petition is being amended to include the deficiency.

Re: Bankruptcy Chapter 7

Secured debts are discharged, just like unsecured ones ... it's the lien that remains. And a lack of equity does not remove the automatic stay, only a court order (or closing the case) can do that.

In your case, if the Notice of Default was filed prior to filing your BK, then the property cannot be sold until 7 months later, unless Relief From Stay is granted by the court (or the case is dismissed prematurely). If the NOD was not filed prior to filing, then the property cannot be sold until at least 4 months after the stay is lifted.

Re: Bankruptcy Chapter 7

Foreclosure is a 4-month process (from Notice of Default to Trustee's Sale). The clock stops during BK (assuming it even started); but the clock restarts whenever the automatic stay is lifted (either in response to the lenders motion for relief or when the case is closed).