I hear this question at least twice a week. A client will come into the office and say I have a foreclosure sale in one week, if I file for bankruptcy before the sale, how long will I be able to remain in the home? Unfortunately there is no exact answer to this question, however we can estimate for the client.
The filing of a bankruptcy creates a shield called the automatic stay, once the automatic stay has come into play everything is frozen, including the foreclosure sale. Generally the automatic stay is only good for the life of the bankruptcy (approximately 90 days in a chapter 7), however it can be shortened by an aggressive lender. In order to pursue the foreclosure, the lender will need to do one of two things
- The lender can move for relief from the automatic stay in the bankruptcy case. Basically this means the lender wants the automatic stay lifted before the case is over, ie to shorten the 90 day period. This relief from the automatic stay will likely be granted, and the debtor will then be able to reschedule a foreclosure sale. An aggressive lender will do this.
- The lender can wait till the automatic stay is over (approximately 90 days, or when the bankruptcy case is over). Once the automatic stay is over the lender can continue with their foreclosure process and reschedule a sale date.
So the answer to the clients question – it really depends on the aggressiveness of the lender. Realistically it could be an additional three to six months but there are no guarantees. However there is one major caveat with this, some southern district of Florida bankruptcy trustees have begun collecting rents from the debtors who are surrendering their homes but remaining in them until they are sold. So don’t expect to live there for free.
If you are thinking of filing for bankruptcy in Florida and would like a free consultation to review your situation then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553. We offer free consultations in any of our offices located in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.