Tagline
623-208-6098

Foreclosures and bankruptcy.

When one files for Chapter 7 bankruptcy, a common concern is whether a bank may foreclose on a property during the bankruptcy proceeding or following the proceeding. While some people file for bankruptcy with the sole intention of avoiding foreclosure, they should be careful in doing so. Banks may still be able to proceed with foreclosure even if a homeowner has filed for bankruptcy.

In many cases, a lender can request that it receive priority in payment during a bankruptcy proceeding. This means that the debtor has to continue to make monthly mortgage payments despite the fact that a Chapter 7 bankruptcy filing has been made. The lender may also attempt to have its account removed from the bankruptcy estate so that it can foreclose on the mortgage at a later date.

If a bank is foreclosing on a home in Arizona, it is important to be aware that Arizona is a nonjudicial state. This means that the lender may pursue an auction outside of the courtroom, although it has to follow statutory rules and regulations. A homeowner essentially has no time in court to contest the foreclosure. In some cases the lender will wait for the bankruptcy proceedings to end before beginning or continuing the foreclosure process. In other cases it may ask the court for permission to go forward with a sale.

Foreclosures can have a significant impact on a person's credit report. There may be instances in which a lender will agree to a temporary modification of the payment schedule in order to enable a homeowner to continue making an attempt at meeting the obligations. A bankruptcy attorney may be able to determine whether alternate forms of debt relief are available.

Source: ABC News, "Foreclosure on Property After Bankruptcy?", Justin Harelik, October 25, 2013

No Comments

Leave a comment
Comment Information
  • MCBA | Maricopa County Bar Association
  • State Bar of Arizona
  • ABA | American bar Association | Defending Liberty Pursuing Justice
  • Oregon State bar
  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
Schedule A Consultation Today

Attorneys You Can Depend On And Trust

The Dodds Law Firm, PLC, is located in Surprise and serves clients throughout the West Valley area. To schedule a consultation with a lawyer, call 623-208-6098 or toll free at 877-827-9906. You can also contact us online.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy