Legal Question in Real Estate Law in New York

This is not making sense. The stay is automatic: as soon as the petition is filed, the stay takes effect UNLESS the debtor is a serial filer who has been sanctioned through a decree that no future filings will trigger the automatic stay.

I had a case, once, in which such a debtor filed at midnight the day before the foreclosure sale. The sale went forward.

If I were a loan servicer negotiating a modification and the borrower filed a bankruptcy petition, I would stop negotiating. I would have my say on bankruptcy court and if the debtor cannot give me the indubitable equivalent of the agreed security, I would move to life the stay. In that case, you could not expect to get very far in the modification negotiations. The main reason the bank is negotiating is because they don't want to deal with bankruptcy. Once you play that card, they no longer have an inventive to settle. It's your deal and your choice, but my advice is don't file bankruptcy unless you are convinced that the negotiations are getting nowhere.