Bankruptcy Information
Bankruptcy often comes up in the same conversation as foreclosure. Here is what the words mean.
Chapter 7, Chapter 13, the automatic stay and who may prepare a petition, in plain English, plus the points to raise with a bankruptcy attorney.
Questions? Call 516-499-1731.
The automatic stay, in plain English
The phrase homeowners hear first is automatic stay.
It is a court order under federal bankruptcy law that takes effect when a bankruptcy case is filed. Federal statute sets what it reaches and how long it lasts, and a judge can lift it.
Chapter 7 and Chapter 13
The two chapters homeowners hear about most.
Chapter 7
Chapter 7 is often described as liquidation. It can discharge certain unsecured debts quickly. To discharge a debt is to end the obligation to pay it. An unsecured debt has no property pledged against it. A mortgage is secured.
Chapter 7 generally does not, by itself, let you catch up missed mortgage payments, and property not protected by an exemption may be affected.
Chapter 13
Chapter 13 is a reorganization for individuals with regular income. It runs on a repayment plan over several years. It is the chapter that comes up when someone behind on a mortgage wants to keep the home.
Other chapters
There are other chapters, and states differ in what property is protected.
Who may prepare a bankruptcy petition
A bankruptcy petition is prepared by the person filing, by a licensed attorney, or by a bankruptcy petition preparer: a non-attorney paid to prepare bankruptcy documents. Federal law regulates that role under 11 U.S.C. 110.
A petition preparer may not give legal advice, such as whether to file, which chapter to choose or what property to claim as exempt. Before taking any fee, a preparer must give you a written notice, on an official form, saying they are not an attorney.
If someone who is not an attorney offers to prepare your bankruptcy papers, ask for that notice before you pay. Prime Real Estate Consultants is not a petition preparer and prepares no bankruptcy papers.
Before you meet a bankruptcy attorney
Six points that shape the first conversation. Bring them as questions.
- Bankruptcy is a federal court process, separate from a state foreclosure, though the two interact.
- Credit counseling from an approved agency is generally required before filing.
- A filing is public record, with credit consequences that last for years.
- Filing does not erase a mortgage lien (the lender's claim on the property) if you keep the home.
- Repeat filings can affect how long the automatic stay lasts.
- Ask what a first meeting costs, and get any fee agreement in writing before you hire anyone.
Research to bring to your attorney
Bankruptcy papers list every debt secured by your home, so your attorney needs to know what is recorded against it.
The Homeowner Research Document gives you that record: every filing on your property, connected, dated and counted, with the data from homes like yours and alerts when anything changes. If you are facing foreclosure, it includes a full report on your foreclosure file, organized so your attorney can work from it at your first meeting.
We also coordinate introductions to licensed bankruptcy attorneys. They are independent, and you would be their client. See how referral coordination works.
Bankruptcy guides from official sources
The United States Courts publish plain-language bankruptcy basics at uscourts.gov.
The U.S. Trustee Program lists the credit counseling agencies approved for your district at justice.gov/ust.
Talk to a person.
Call 516-499-1731, Monday through Friday, 9:00 AM to 6:00 PM. Saturday appointments are available on request. If we are with another client, leave a message with your name, your phone number, and the county your property is in, and we will call you back.
Prime Real Estate Consultants
70 Sunrise Highway, Suite 500, Valley Stream, NY 11581
customerservice@
| Monday to Friday | 9:00 AM to 6:00 PM |
|---|---|
| Saturday | By appointment only |
| Sunday | Closed |
Free help is also available.
You do not have to pay anyone for help with a foreclosure. HUD-approved housing counseling agencies give free counseling nationwide. Call 1-800-569-4287 or visit hud.gov. Many states and counties also run free foreclosure prevention programs. We want you to know about them, whether or not you ever hire us.
If you have a sale date or a court date coming up, call a licensed attorney today.
We are not a law firm.
Prime Real Estate Consultants is a property research and consulting business. We do not practice law or represent anyone, and nothing on this site is legal, tax or financial advice. Contacting us or buying a service does not create an attorney-client relationship.