On behalf of Law Offices of Mark M. Kratter, LLC on March 22, 2013
Foreclosure is an ominous procedure in which a bank or other lender seeks to seize real estate on which it has a mortgage lien. In many cases, this can mean literally putting a family out of their home. It is a particularly frightening experience for some homeowners when the procedure gets to the point of an impending sheriff's sale. The good news is that in Connecticut as well as throughout the country, the homeowner can at least temporarily stop a foreclosure sale by filing a bankruptcy petition.
This procedure was exemplified in a recent press report of a medical doctor's filing bankruptcy just a few days prior to a scheduled sheriff's sale of his home. When a consumer bankruptcy is filed, the federal bankruptcy court issues an order called an 'automatic stay'. The order stops any further creditor actions, including foreclosure proceedings and even a sheriff's sale.
The doctor was able to avoid foreclosure and keep his home pending a determination of whether he could submit a plan to get his mortgage paid up-to-date. Although not mentioned in the press report, it's most likely that the doctor filed a Chapter 13 bankruptcy. This is the chapter most used by a homeowner who wants to keep the home - this remedy allows making monthly payments to try and get the loan current.
It's also reported that the doctor's filing papers were incomplete and that the court gave him until a date certain to get the rest of the information filed. When a foreclosure sale needs to be stopped under emergency circumstances, it's common to file a bare-bones petition with the minimally-required information. The debtor is then routinely given some additional time to complete the submission.
The debtor here owes substantial amounts to credit card companies. Chapter 13 allows making payments on the home mortgage while discharging credit card and other unsecured debt usually without any payment. If payments are required on credit card debt, it may be limited to a small percentage of the amounts due. For those in Connecticut who face a foreclosure crisis, the most effective procedure is to consult as soon as possible with an experienced bankruptcy professional for a detailed evaluation of the options and remedies available.
Source: triblive.com, "Sheriff's sale of Monsour estate in Ligonier Twp. on hold," Richard Gazarik, March 6, 2013
