Legal Question in Bankruptcy in United States Minor Outlying Islands

Re: chapter 7 bankrupcty

Yes, for an indefinite period during the bankruptcy, and perhaps even through the bankruptcy. A chapter 7 bankruptcy affects primarily unsecured debts. A secured debt, as in the case of the mortgage on the home can be dealt with in bankruptcy by indicating surrender of the property or by indicating a desire to re-affirm the debt and continue the obligation.

In the present environment lenders are drowning in repossessed properties and will work with those who indicate a desire to re-affirm.

Even if surrender is indicated - the state law remedy of the mortgage lender is foreclosure, and that is interrupted by the Federal Bankruptcy law's protective stay. If the lender intends to proceed with foreclosure while the bankruptcy case is pending they need to act through the bankruptcy court by moving the court to lift the protective stay so the process of foreclosure can begin. The alternative for the lender is to wait for the bankruptcy case to close (normally ~120-130 days after filing) and then file the foreclosure action. Even after a foreclosure has been initiated, until the sale has been completed, and despite the severe delinquency in obligation to the lender, ownership of the property has not passed. After sale, proper eviction procedures need to be followed to remove a tenant/occupier/former owner from the premises. All of that takes time.

The specific details of the situation will be critical to what can and cannot be done in the circumstances a homeowner in chapter 7 faces. You need to consult a Wisconsin licensed attorney to discuss the matter in depth.

Continuing to Live in House After Filing Chapter 7 Bankruptcy

Continuing to Live in House After Filing Chapter 7 bankruptcy

The answer to this question is often "yes," depending upon the facts. Foreclosure lawsuits are the only way that lenders can repossess homestead real property and these are very time consuming, even without a bankruptcy filing; they take a minimum of 7-9 months in WI without bankruptcy. An eviction order (aka, "writ of assistance") cannot be issued until the foreclosure process ends with a confirmed sheriff's sale. Once a bankruptcy is filed, this process goes "on hold" until the bankruptcy ends or the automatic stay is lifted. The debtor can normally remain in the home until all this concludes. Additionally, a chapter 13 bankruptcy can often enable a debtor (who has sufficient income)to reinstate a mortgage and remain in a home indefinitely. In the current depressed real estate market, it is likely that debtors will be able to negotiate better deals than ever in chapter 13's and conceivably end up with both lower interest rates and less owed. Since I am not your attorney, I cannot advise you--these are only sweeping generalizations which will not apply in all cases. You therefore need to consult with your own attorney as soon as possible.