Bankruptcy Termination of Automatic Stay in Chapter 13 Bankruptcy and Divorce

July 30, 2010 - PRLog -- Termination of Automatic Stay in Chapter 13 bankruptcy case can happen voluntarily and involuntarily.

If a debtor chooses to surrender property the an unopposed motion for relief from automatic stay can be entered with the court to allow the creditor to repossess or foreclose on the collateral.

If a debtor had fallen behind with secured creditor at any point in Chapter 13 case then they likely have signed agreed order filed with the court to cure any delinquency. The agreed order will generally allow 2 notices of defaults of Chapter 13 debtor falls behind on payments to the Chapter 13 Trustee or on direct payments to secured creditor. If the default is not secured within 10 days, or specified time per the Notice of default, then the creditor can terminate the automatic stay without further action.

Once the automatic stay is terminated then the Chapter 13 debtor can contact the creditor directly to make arrangements to keep home or vehicle. If this in relation to a mortgage, many Chapter 13 debtors can contact mortgage company to make arrangements for forbearance agreement or loan modification to allow them to keep home.

Divorce seemed to be one of the main reasons to think about filing a bankruptcy last week. For some it was because their home is up for foreclosure because of having to places to live or to busy paying their attorneys. So now the decision has to be made to save the house or let it go. Do you stop the sale at least for several months till the kids finish out the school year? The chapter 13 can help you keep the house as long as you want or only stay it long enough to allow you the time to find another place. If possible looking at both people filing a chapter 7 together if they qualify and stopping the sale for a couple of month. What they would be doing is surrendering the house along with getting rid of the credit cards and maybe the car they can’t afford now. This way after the divorce they both can start over.
IF only one person wants to file they can, but the other person will still be responsible for all the debts even if the divorce decree says something different. IF they both can not do a 7 together they might be able to do separate 7 or one do a 7 and the other a 13 to pay some of the debts and maybe save the house.
Along with the process of taking to your divorce attorney you should always consider talking to a bankruptcy attorney to make sure you know your options.

For more information visit http://www.bankrupcy-alternative.com/questions.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10825588-bankruptcy-forced-place-ins... and here is another http://www.prlog.org/10825568-bankruptcy-who-is-getting-p... for your reading enjoyment.

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