Specialized Situation
Bankruptcy & Foreclosure
A bankruptcy filing triggers an automatic stay that generally halts a pending trustee sale immediately. It is the most reliable emergency brake when nothing else can close in time, but it is a legal proceeding with lasting consequences and must be handled by an attorney.
How the automatic stay interacts with a trustee sale
What you need to know
- The automatic stay under section 362 of the Bankruptcy Code generally stops a foreclosure sale the moment the petition is filed.
- Chapter 13 allows arrears to be cured over a three-to-five-year plan while you maintain the regular payment, which is why it is the common choice for home retention.
- Chapter 7 provides temporary relief but does not by itself cure mortgage arrears, so the lender can typically resume foreclosure after the stay lifts.
- Repeat filings within a twelve-month period can limit or eliminate the automatic stay, and courts may require a motion to impose it.
- The lender can move for relief from stay. Filing bankruptcy is not a permanent solution absent a viable plan.
- This program does not provide legal advice. Only a licensed bankruptcy attorney can advise you on filing.