If a debtor is behind in house or car payments, can Chapter 7 stop a foreclosure or repossession from taking place?
Whenever any bankruptcy case is filed, the creditors are stopped from taking action to collect the debts that were owed at the time of the bankruptcy. This feature of bankruptcy is called the “automatic stay.” The automatic stay stops a foreclosure or repossession from going forward. However, no bankruptcy filing allows a debtor to keep property that is security for a loan without making payments on the loan. For example, debtors with home mortgages and car loans, cannot keep their homes and cars without making payments. As soon as the bankruptcy case is closed, the automatic stay terminates, and the creditor can proceed with foreclosure or repossession. Moreover, if the debtor is not current on payments, creditors may ask the court to terminate the automatic stay while the bankruptcy is still pending, and, in chapter 7, creditors are usually able to terminate the automatic stay. In order to keep property that is security for a loan, a debtor often must enter into a “reaffirmation agre
Related Questions
- If a debtor is behind in house or car payments, can Chapter 13 stop a foreclosure or repossession from taking place?
- If a debtor is behind in house or car payments, can Chapter 7 stop a foreclosure or repossession from taking place?
- I heard a Chapter 7 bankruptcy would not stop home foreclosure or auto repossession?
