Under the federal Bankruptcy Code, consumers have an opportunity to regain financial stability. However, provisions exist to prevent repeat bankruptcy filings to stop home foreclosure without an attempt to achieve economic rehabilitation. When homeowners nationwide, including in Florida, file for bankruptcy, an automatic stay stops foreclosure and other collection activities.
If a homeowner files another bankruptcy case within one year of the dismissal of a previous filing, the duration of the automatic stay will be limited. In such a case, the automatic stay will only be valid for 30 days after the second bankruptcy case was filed. When this occurs, the homeowner who seeks the protection of the automatic stay must overcome the court’s presumption that the repeat bankruptcy filing was not in good faith.
In a recent case, a creditor wants to foreclose on a property on which it holds a tax lien for outstanding school and general taxes. The consumer sought the protection of the automatic stay in her Chapter 13 bankruptcy filing. However, the court granted the creditor permission to proceed with collecting its debt. The court lifted the stay on administrative, judicial and other proceedings that were initiated before the bankruptcy filing, ruling that the controlling 30-day period had expired.
Homeowners in Florida who are facing the threat of home foreclosure may benefit from gaining information on the protection that the Bankruptcy Code offers. To avoid circumstances similar to those described above, it may be appropriate to seek the guidance of an experienced bankruptcy attorney. With the support of a seasoned lawyer, a solution for the financial problems may be found, and home foreclosure might be prevented.
Source: bna.com, “Two Time Repeat Ch. 13 Filer Can’t Halt Foreclosure on Property”, Diane Davis, Dec. 9, 2016