Which Bankruptcy Stops Foreclosure in Philadelphia?

Which Bankruptcy Stops Foreclosure in Philadelphia?

According to the Federal Deposit Insurance Corporation, approximately one in every 200 homes is foreclosed on every year in the United States. In a nation with over 74 million owner-occupied homes (according to U.S. Census data), that means roughly 370,000 houses are foreclosed on each year. That may sound like a high number, but is actually a rather conservative estimate compared to the 933,045 bank repossessions, auctions, and default notices reported in 2016. If you’re a Philadelphia homeowner who’s worried about foreclosure, you certainly not alone. However, there’s good news: you may be able to keep your house and get debt relief by filing for bankruptcy. Our Philadelphia bankruptcy attorneys explain how bankruptcy in Pennsylvania can delay or even stop foreclosure proceedings against your home, whether you live in Philadelphia or other parts of the state. We’ll talk about some core differences between Chapter 7 and Chapter 13, and discuss how each type of bankruptcy affects foreclosure in Philadelphia.

mortgage foreclosure defense lawyer

How Bankruptcy’s Automatic Stay Stops Foreclosure in Pennsylvania

As you’re already aware, bankruptcy can help to reduce or erase many of your debts – or, to be more accurate, your liability for your debts. In other words, the debt continues to exist, but you are no longer liable for paying it.

What fewer people realize is that bankruptcy also includes a feature known as the “automatic stay,” which can have significant effects on foreclosure proceedings against your home. This applies in both Chapter 7 bankruptcy cases and Chapter 13 bankruptcy cases.

The automatic stay is an “injunction,” or court order, that automatically halts (“stays”) debt collection actions. In other words, debt collectors can’t come after you for payments while the automatic stay is in effect. To provide a few examples, the automatic stay can freeze:

  • Foreclosure Sales
  • Utility Disconnections
  • Vehicle Repossessions
  • Wage Garnishments

Our Philadelphia Chapter 13 lawyers will explain more about the automatic stay and foreclosure in just a moment. But first, we should point out that there are situations where creditors can get around the automatic stay. In order for this to occur, the creditor must go through the process of filing a Motion for Relief from the Automatic Stay, which needs to be approved by the court before the stay can be lifted.

The automatic stay takes immediate effect when you file your petition for bankruptcy with help from a Delaware County Chapter 13 bankruptcy attorney. With some exceptions, the automatic stay continues to provide protection until the bankruptcy case is discharged. In a Chapter 7 case, the discharge generally occurs around four to six months after filing. In Chapter 13 cases, the timeline is closer to three to five years.

Unless your creditors successfully lift the automatic stay, your home cannot be foreclosed on while your bankruptcy case is pending. However, you might lose your home when your bankruptcy ends, depending on which chapter you filed. Keep reading to learn more about the difference between Chapter 7 and Chapter 13 when it comes to preventing foreclosure in Philadelphia.

How Filing Chapter 13 Can Prevent Foreclosure in Philadelphia

chapter 13 bankruptcy attorneys

Regardless of whether you file for bankruptcy under Chapter 7 or Chapter 13, you will generally receive the protection of the automatic stay. There is an exception if you have had more than two bankruptcy cases dismissed in the previous year, in which case your third filing will not trigger the stay.

However, the stay is a temporary condition. While the stay can significantly delay foreclosure proceedings (which is certainly useful in that the filer gains more time to plan for the future), it will not, on its own, be sufficient to stop foreclosure from occurring.

If you want to use bankruptcy to avoid foreclosure, you likely should file Chapter 13 if possible. Though longer and more complicated than Chapter 7, Chapter 13 bankruptcy gives you the opportunity to keep your home – even after the automatic stay ends. Our Montgomery County Chapter 13 bankruptcy lawyers can help you decide which type of bankruptcy is best for your situation.

If you declare Chapter 13 bankruptcy in Pennsylvania, you will create a long-term debt restructuring plan with your creditors, which is often called the “reorganization” plan. In accordance with the terms of your reorganization plan (which must be approved by the bankruptcy court), you will use your disposable income to make small, manageable payments on certain debts over a period of three to five years.

You can include delinquent or unpaid mortgage payments, which are known as “arrearages,” in your Chapter 13 reorganization plan. If you strictly adhere to your reorganization plan, and catch up on your unpaid mortgage payments over the three- to five-year period, you should be able to keep your home and avoid foreclosure with bankruptcy.

There is, however, a catch. In order to qualify for Chapter 13 bankruptcy, you must have enough disposable income to cover the cost of the reorganization plan, which is absent from Chapter 7 bankruptcy. In Chapter 7 bankruptcy, which is designed for debtors who don’t have enough disposable income for a Chapter 13 reorganization plan, a trustee sells some of your property in order to help fulfill your financial obligations to creditors.

Fortunately, even if you are unable to file Chapter 13, it may still be possible to avoid foreclosure and save your home by conducting a short sale.  Additionally, mortgage modification may be a viable alternative to bankruptcy if you are behind on your payments, but the mortgagee has not yet initiated foreclosure proceedings. Furthermore, there are many situations where the Chapter 7 trustee simply declines to sell the debtor’s home because the property’s value is low. Otherwise, Chapter 7 bankruptcy exemptions may enable you to protect your home.

Philadelphia Bankruptcy Lawyers Can Help You Stop Foreclosure

If you’re concerned about foreclosure proceedings against your home, it is critical that you speak to an experienced foreclosure defense lawyer immediately. We understand how stressful it is to confront the prospect of foreclosure, but the longer you wait to act, the fewer options you will have, and the more difficult it will become to protect or save your home. For optimal results, it is crucial that you seek legal help as soon as possible.

To get started discussing your legal options confidentially in a free bankruptcy consultation, call Sadek & Cooper Law Offices at (215)-545-0008 right away. Serving Philadelphia, Delaware County, Bucks County, and beyond, our Pennsylvania bankruptcy lawyers assist couples, individuals, and business owners with Chapter 7, Chapter 13, and various bankruptcy alternatives.

GET YOUR FREE CONSULTATION

superlawyers_badge

SEEWHAT OUR CLIENTS ARE SAYING

Thomas Wright
Thomas Wright
15:09 24 Apr 18
Sadek and Cooper Law did a great job on my bankruptcy case. I really appreciate their assistant. Thank you
Kelly McKenna
Kelly McKenna
11:57 19 Apr 18
This form - specifically Yoninah Orenstein and Patrick Cooper are PHENOMENAL. They were great to work with, very fair with legal fees, and successful in getting an excellent settlement for my divorce (short term marriage
Dessiana Cruz
Dessiana Cruz
13:11 04 Apr 18
I was nervous about bankruptcy, but from the moment I stepped in your office I felt at ease. This process was so easy with your help, that yesterday I was talking to my coworkers about it and recommending your firm to them. You make something that’s scary seem easy and I thank you so much for helping me!
Valerie Nesbitt
Valerie Nesbitt
14:51 03 Apr 18
Sadek and Cooper have been excellent. Everyone has been extremely helpful and patient. The lawyers I have worked with, Matt and Brad, are extremely knowledgeable. I felt very comfortable with them handling my case.
Marlena Lucas
Marlena Lucas
16:08 02 Apr 18
Very simple. Any time I had questions, they were answered quickly. The lawyers are just great. Just a fast painless process.
James Smith Sr
James Smith Sr
13:19 14 Mar 18
Everything has been great. Really awesome job with my case... You and your staff have done a perfect job in my opinion.
Michkel Davis
Michkel Davis
17:02 09 Mar 18
Mr. Sadek was the best and most thorough lawyer I’ve ever met. He’s very human and caring about our case. His whole staff is great too. Highly recommend...
Tamika Richardson
Tamika Richardson
14:56 01 Mar 18
My bankruptcy went very smoothly with your firm. No issues. You are all very nice. That’s why I recommend my sister to your firm and your now helping her too! Thanks again.
Geraldine Ross
Geraldine Ross
14:14 28 Feb 18
This is an Excellent firm to work with; my questions were answered in a timely manner and I felt very supportive in handling my bankruptcy. I would highly recommend this firm to others who have found themselves in a position like mine.
Lavern Baker
Lavern Baker
17:03 23 Feb 18
You are all super lawyers. Brad and Matt made me feel comfortable. Every one in your office so nice and just made it easy. You’re the best!
peter b
peter b
19:42 21 Feb 18
Thank you, Sadek and Cooper Law offices for your dedication on my behalf. I appreciate Matthew and Patrick and your staff and all that everyone did to support me in this legal matter. You took an embarrassing, sad experience, for me, and turned it into a successful solution without all the emotional pain expected. After dealing with a loan modification company for over eighteen months without going to an attorney first that is the biggest mistake anyone can make. The Modification Companies set out to sell you lies, broken promises and dilute the homeowner's assets with no knowledge of any kind of law. I can't stress enough stay away from Modification companies, as a Military Veteran and family man, protect you or your family best interest. Go directly to Sadek and Copper you will not regret it! This firm moves with Super speed and diligence protecting you and your family's the entire process, even after watching some of these other attorneys in the courtroom appearing to mishandled their clients’ cases before the Trustee. You made it easy and I’m finally getting my financial life back on track! Thank you for your prompt replies to me, your clear information and preparation needed when at the courthouse. I would of course recommend you to others and I am glad you were the one who had my case. Kind genuine law firm who treats you like family. God bless you all and I pray for your continued success in your field of expertise. This firm is Super Lawyers for a reason. They are the best at what they do! Pete
Doug Tinlin
Doug Tinlin
06:55 15 Feb 18
Brad Sadek gave me hope when he decided to handle my mortgage for enclosure defense. I had exactly 10 days left of the 30 days ultimatum given me, but he was able to bargain for an extra 30 days for me to pay up. That duration turned out just right.
Jacinth Jacinth
Jacinth Jacinth
16:07 31 Jan 18
Excellent service. Brad and Matt were outstanding and friendly. They helped me through this. I’ve never met attorneys like these. Thank you!
julie njoku
julie njoku
12:29 24 Jan 18
Brad Sadek is excellent!. He understands and he's fair. You feel like you have someone fighting for you. The staff is friendly, professional, and courteous. These guys are the best at what they do !
Owen Black
Owen Black
20:14 09 Jan 18
Thanks for the great service! I would recommend this firm highly. Throughout the years I have been helped by this firm greatly and very much appreciated.
Steven Rychalsky
Steven Rychalsky
15:30 09 Jan 18
Sadek and Cooper law office was a wonderful experience to work with. Bankruptcy is a difficult experience but they helped with the stress so much and made it easy. I would recommend Sadek and copper too anyone.
Chris Kourelias
Chris Kourelias
19:09 28 Dec 17
Working with both Brad & Matthew was a pleasure. Both gentlemen are extremely knowledgeable and helpful in providing me the right assistance needed to make the correct decision to benefit me in the long run. I would recommend both candidates to anyone looking for assistance with a reputable law firm.
Jennyfer Santana
Jennyfer Santana
21:17 21 Dec 17
Highly Recommended. Matt & Brad assisted with my case. I felt comfortable throughout the entire process. Matt was very understanding, patient, and ensured he answered all my questions! Both great guys and very friendly! It was a pleasure working with Matt and Brad.
Next Reviews Write a review
Call Us Now