How does the borrower filing bankruptcy affect the foreclosure?
The filing of a petition of bankruptcy by the borrower, a guarantor, by a tenant, or by the beneficiary of a junior deed of trust, will immediately stop the foreclosure. Once bankruptcy is filed all foreclosure proceedings are stayed. The creditor must obtain a Relief from Stay before the foreclosure can be resumed. A motion for Relief from Stay can not typically be filed until the debtor has filed their bankruptcy plan and it can be proven to the Bankruptcy Court that their plan does not adequately protect the creditor. The process to secure a Relief from Stay usually takes a minimum of three to four months after filing. Attorneys Asset Recovery & Collection Services has the experience to navigate the bankruptcy process to secure a Relief from Stay as soon as possible.
