Legal Question in Bankruptcy in California
if i file for chapter 7 bankruptcy & i am the spouse & a signatory to the deed of trust but not a borrower on the note will the trustee sale (foreclosure sale) of my house be postponed?
1 Answer from Attorneys
Yes... so long as you have an ownership interest in the property then the automatic stay will stop any action against either your property or the property of your estate in bankruptcy. In this case the property will become estate property when you file and will be abandoned by the trustee after your meeting of creditors unless it has equity that could not be exempt. If you are upside down on the house (owe more than its value) then the trustee will surely abandon the estate's interest in the property after the meeting of creditors and it will become your property again but it will continue to be protected by the automatic stay until you get your discharge (60 days after the meeting of creditors). Of course, the bank can ask the court for relief of stay at any time so that the trustee can proceed with the sale before your discharge.