This is very important for people who are contemplating filing for bankruptcy, there are numerous things that a person can hope to achieve by filing for bankruptcy.
One of the things that most people look for is the automatic stay that accompanies bankruptcy, this is called the 11 USC 362 act. When a debtor applies for bankruptcy, this act automatically ensures that the debtor does not lose the home that they are living in, and protects them against foreclosure. These are a few things that are most important for those who need to get in get in breathing room to sort out their finances.
This ensures that banks and other secured financial institutes do not have the ability to reclaim any real estate owned by the creditor. The next step is negotiations between the creditor and the debtor on how best to resolve the bankruptcy of the debtor, and these proceedings are overseen by a bankruptcy judge.
Even though the process of filing for bankruptcy may provide the debtor with a lot of protection, there are limitations that it does have, and it doesn’t provide the debtor with unlimited protection, only reasonable protection. The intention of such laws is to provide the debtor with the means and ability to resolve the issue as well as to find a solution to the predicament that they are in. This doesn’t however mean that they are free from making any further payments on the property or where ever they owe money.
The creditor also does have certain rights that are upheld by the bankruptcy court and some of these include the fact that, a court can overturn the stay on the property if the creditor can prove that the stay is jeopardizing the creditor’s interest in the property.
It is the responsibility of the debtor to prove to the court that the interests of the property for the creditor are not hampered by the stay on foreclosure. To do this the debtor needs to prove the amount of payments made on that property, or the debtor needs to provide alternate security in the form of additional real estate to the creditor. However in most cases debtors do not have a lot of other collateral that they can put up, and in such cases the debtor needs to be able to provide the creditor with periodic monthly payments, which are usually done in the form of equal monthly installments.
If it is impossible for the debtor to provide the court and the creditor with any of this the creditor can get permission from the court to proceed with foreclosure on the real estate.
Additional Resources: California Code of Civil Procedure 580e
For more information about our legal services, please contact us at 800-233-8521.
Palm Springs Litigation Attorney, All Rights Reserved - Copyright 2021.
No attorney-client relationship. The Law Office of Mitchell Sussman maintains this website exclusively for informational purposes. Viewing this site, using information from it, or communicating with The Law Office of Mitchell Sussman through this site by email does not create an attorney-client relationship between you The Law Office of Mitchell Sussman.
Nonreliance. Online readers should not act or decline to act, based on content from this site, without first consulting an attorney or other appropriate professional. Because the law changes constantly, this website's content may not indicate the current state of the law. Nothing on this site predicts or guarantees future results.