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How Can I Keep My Home In a Second or Even Third Bankruptcy Filing?

auto-stayThe automatic stay that normally applies when a debtor files bankruptcy, does not work the same in a second or even third bankruptcy case.  This has caught many debtors unaware and may cause the loss of a home.

In a 2nd bankruptcy filing, the automatic stay expires after 30 days.  During that time you have to get it extended.  We recommend filing a motion to do so when the case is filed to have enough time to get an order entered before the stay expires.

Sometimes debtors find it necessary to file a 3rd bankruptcy.  Perhaps a job loss or insufficient paperwork caused the prior bankruptcies to be dismissed.  If so, it’s important to know that the automatic stay does not apply at all for a 3rd bankruptcy.  As soon as possible, the debtor would want to file a motion to impose the stay, even to the point of filing a request for an emergency hearing if a foreclosure sale is looming.  It’s also important to note that you cannot file bankruptcy on the eve of a foreclosure sale because there is no stay until you can get one in place.  Typically you would have to identify factors in the motion and at the hearing as to why this third case will be more successful than the prior ones that were dismissed, as well as show the feasibility of any plan to keep the home (which could include a loan modification at an estimated payment of 31% of your gross income).

Without a stay in place, a creditor can cause the Chapter 13 Plan to lack feasibility because any creditor can use state court remedies to pursue their rights and upset the apple cart.  There is no discharge of debt until the plan is complete, so the stay will act to prevent creditors from otherwise enforcing their debts and taking collection actions against you.

When you have assets to protect, bankruptcy can be complicated and risky.  It is well worth hiring an attorney to have it done right.  Occasionally we are requested to get involved in a case to “fix” something that went wrong, and many times the affirmations and actions made by a debtor in an unsuccessful case (or a case that is facing a motion to dismiss and about to go down the tubes) cannot be undone.  It is always more costly to fix something after the fact as well.

See our bankruptcy resources for more information.  Why should I file a Chapter 13 instead of a Chapter 7?

We offer free consultations for people needing to file bankruptcy in the Tampa Bay area.

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