Legal Question in Bankruptcy in California

Re: Foreclosure and Ch.7 BK

Filing any type of bankruptcy will create an automatic stay that will at least temporarily stop the foreclosure. If your goal is to keep your house, you will need to do one of 3 things: (1) file for Chapter 13 and get a court-approved plan to repay the past due amounts over time; (2) reach an agreement with the bank outside of bankruptcy for to bring the loan current; or (3) pay off the past due amount in full.

A chapter 7 will not eliminate the lien your lender has on the home. The only way you can keep it is to make arrangements to pay the past due balance in full.

The bankruptcy reform laws may it harder to file for bankruptcy and the include credit counseling that general must be completed before you file for bankruptcy. This decision cannot be made lightly, so you need to a local bankrupttcy attorney right away to discuss your options before the foreclosure sale occurs.