One of the most frustrating situations I encounter as a bankruptcy attorney is being too late to help someone. Oftentimes, a person doesn’t contact me until after a repossession or foreclosure occurs. Is it too late to save your property at that point?
Generally speaking, one of the greatest benefits to filing a bankruptcy is the immediate effect the filing has on repossession and foreclosure efforts by creditors. The bankruptcy creates an “automatic stay” which prohibits any collection effort by creditors. I compare it to a force field that protects your property. However, the automatic stay does not go into effect until the day of filing. Therefore, if the repossession or foreclosure has already taken place, a bankruptcy won’t undo it. If you wish to save your property, you must speak to a bankruptcy attorney about filing BEFORE a repossession or foreclosure happens. A bankruptcy will stop foreclosures and repossessions and allow you an opportunity to keep your property.