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It has the automatic stay to stop a foreclosure to file for bankruptcy?

Oct 28

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One of the main reasons for filing for bankruptcy for many is the automatic stay. What exactly is the automatic stay with regard to filing for bankruptcy? The automatic stay’m in essence, a court order to all creditors to stop all further collection activities, including but not limited to harassing phone calls, letters, lawsuits and more critically foreclosures .

The main reason why the debtors taking advantage of an automatic stay provision of U.S. bankruptcy law is to stop a foreclosure. With the U.S. economy in the state of agitation because of the housing crisis, many homeowners are struggling to pay his mortgage and is facing possible foreclosure.

By filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy the debtor is given an automatic stay under bankruptcy law that will stop any and all proceedings rmning shielded against the debtor. This may be particularly important to try to save your home if you’m in a position where you can have reconciliation, kt a loan modification or if you continue with a short sale and you need a little ‘time to complete the fastighetsaff

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A Creditor May Recover Damages for Stay Violation

May 1

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By: Jacquelyn L. Mascetti
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
 
Recently the Fifth Circuit, in St. Paul Fire & Marine Ins. Co. v. Labuzan,[i]expanded the definition of “individual” in 362(k) to include creditors as parties able to bring an action for a violation of the automatic stay. Debtor, Contractor Technology, Ltd. (“CTL”), construction company owned by the Labuzans. St. Paul Fire & Marine Ins. Co. (“St. Paul”), the insurer, issued performance and payment bonds on behalf of CTL for its ongoing projects as insurance for the projects owners in case CTL was unable to complete construction. The Labuzans entered into an indemnity agreement with St. Paul and agreed to be held liable if St. Paul had to pay the bonds to the project owners. After facing some financial difficulty, CTL decided to reorganize and voluntarily filed chapter 11. Shortly thereafter, St. Paul contacted the owners of CTL’s current projects and threatened to reduce the bond insurance on the projects if the owners made any payments to CTL for any work done towards the completion of the project.[ii] Caving to the threats, the project owners stopped sending payments to CTL, which drained its remaining assets to pay expenses, and forced the company to convert its proposed reorganization into chapter 7 liquidation.
 

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Automatic stay in bankruptcy

Feb 2

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Exception to automatic stay – 362(b)(22) added in 2005 doesn’t apply because debtor is not residing in property pursuant to a lease or rental agreement. Time to redeem has expired so debtor has a bare possessory interest, but even that is protection by the bankruptcy automatic stay. I’ve heard creditor attorneys verify that in ICLE seminars, waiting until end of the redemption period to file buys the debtor more time since they have to motion for relief from stay, and even after that they have to obtain an eviction order. Client will be a business bankruptcy case. But in December he paid his sister $2,000 on an Oklahoma personal loan. 547(c)(9) sets the minimum on a preference in a business debt case at $5475. The floor applies to the case, not the particular debt. So if the debt is not primarily consumer debt, preference floor is $5475. Insider preferences of less than that have to be disclosed on the SOFA, but are not recoverable.

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