Bankruptcy can protect your home, but you have to act quickly
If you're behind on your mortgage and facing foreclosure, you're not quite out of options. Filing for bankruptcy can stop the foreclosure, at least temporarily, buying you more time to sort out the situation by catching up on your payments or applying for a mortgage modification.
However, the foreclosure process moves quickly, and if you wait too long, you can lose your rights as a homeowner. That's why it's critical that you speak to an experienced bankruptcy attorney as soon as possible if you need to stop foreclosure.
South Carolina follows the "hammer rule" in foreclosure proceedings
In some states, even after a home is sold, the borrower has a "right of redemption" — that is, a period of time after the foreclosure sale in which you have the right to buy back the home. South Carolina is not one of those states. South Carolina follows the "hammer rule," which means once the gavel falls at the foreclosure sale, you have no further rights to the property. So, it's critical that you get the protection of bankruptcy before the sale is final.
What's required for an emergency bankruptcy petition?
An emergency petition, sometimes called a bare-bones or skeleton petition, is a type of bankruptcy petition intended to stop your foreclosure as quickly as possible and buy you more time to either negotiate with the bank or complete the bankruptcy petition. There are generally five things you need to file this petition:
- Form 101, Voluntary Petition for Individuals Filing for Bankruptcy
- Form 121, Your Statement About Your Social Security Numbers
- Names and addresses of all your creditors
- A credit counseling course or waiver request
- A filing fee, request for fee waiver, or request for installment payment
As soon as you submit the emergency petition, the "automatic stay" goes into effect. This is a court order that blocks all collection activities, including foreclosure sales. Under some circumstances, the lender can ask the bankruptcy court to lift the automatic stay and allow the foreclosure sale to proceed, but that generally takes at least two months and often longer.
When you file an emergency petition, you have 14 days to file the rest of the documents needed to complete the bankruptcy filing. If you don't hit that deadline, then your case will usually be dismissed without prejudice, which simply means you can file again right away.
Talk to an experienced South Carolina bankruptcy attorney about your options in foreclosure
Again, timing and precision are critical in emergency bankruptcy petitions. There are specific rules that must be followed in each bankruptcy court, and if you omit a document or make an error, your petition may be dismissed immediately. That's why it's important to work with a bankruptcy lawyer who understands the rules and procedures in the U.S. Bankruptcy Court for the District of South Carolina and knows how to make the process work for you.
If you're facing foreclosure, act quickly to protect your legal rights as a borrower. Give us a call or contact us online today to speak with an experienced bankruptcy attorney at Benjamin R. Matthews & Associates.