Heavy debts can cause numerous problems. Threatening phone calls and emails from debt collectors apart, you could lose your wages, your car or your home to repossession or foreclosure if timely intervention is not done. Filing for personal bankruptcy (Chapter 7 or Chapter 13) puts an automatic stay in place which not only stops the threatening phone calls but also halts repossession or foreclosure proceedings. However, if you file for bankruptcy just on the eve of your foreclosure sale, Los Angeles based bankruptcy law firm https://www.recoverylawgroup.com/ lawyers say things could be a bit tricky. There are always chances of you being unable to contact people at the lender’s foreclosure office to notify them either in person or through email/ fax or phone about your bankruptcy filing to hold the foreclosure proceedings.
You need to be quick if you wish to stop the foreclosure sale from taking place. In case, you are unable to do so, the transaction can be voided, say lawyers, but it takes time. Here’s what you can do to save your property in case of foreclosure sale:
- Attend the foreclosure sale yourself or send a reliable person there early to show your bankruptcy filing papers to the auctioneer prior to the commencement of the sale.
- In case you are unable to attend the foreclosure sale, you can record a Notice of Bankruptcy in the county recorder’s office where the property is located.
- In case no previous bankruptcy had been filed by you, filing of a bankruptcy will result in an automatic stay that can prevent foreclosure proceedings to take place. A foreclosure sale can be voided if it is in violation of the automatic stay. This can be a bit difficult when the sale has already been conducted and the property bought by a bona fide purchaser (BFP). The court decision in this respect is that the foreclosure sale is voidable despite the property being bought by a BFP. However, getting the sale rescinded is a litigator’s worst nightmare.
- In case the sale is held, you could still record the bankruptcy notice before the trustee’s deed is recorded; the latter typically takes a few days after the sale. The recorded notice is a constructive notice which removes all defenses raised by a BFP to seek legal action against voiding of sale.
A bankruptcy attorney can work things around for you to save your property from foreclosure. You can call 888-297-6023 to discuss your case with experienced bankruptcy lawyers.