Bankruptcy And Foreclosure

by Douglas Jacobs, Esq.

February 22, 2010

There is no “cure” for a foreclosure of your home, but bankruptcy can certainly help.  If you haven’t lost your house yet, but are behind in the payments, go talk to a competent bankruptcy attorney as quickly as you can.  There might be a way to save the home in a Chapter 13 .

If, on the other hand, you’ve already been the victim of a foreclosure, bankruptcy can help there too.

First of all, if you haven’t been evicted from the house yet, filing for bankruptcy will slow the process down and give you some more time to move out.  It might also give you some time, while you’re not making a house payment, to save some money to rent a nice place to live.

Understanding the real estate laws in your State can help a lot.  In most places, an eviction, even after a foreclosure, requires court action.  Scary as that may sound, the wheels of justice can move pretty slowly giving you extra time to pack, find a place to live and move.  Just be sure that when you get a court notice you act on it quickly.  Finding a good eviction attorney may help buy you some time, and even if you are broke, the local Legal Aid may be able to help for free.

Additionally, after a foreclosure there are often bills that need to be taken care of and bankruptcy will do just that.  For example, there might be unpaid homeowner’s dues, a line of credit on the house, unpaid electric or other utility bills, etc.  All of that kind of unsecured bill can often be discharged.

So, whether you are just a little late on a house payment, or are facing imminent foreclosure, now is a good time to consult a competent  attorney.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.

Last modified: October 22, 2012