As you know, in Allegheny County, Pennsylvania, sheriff’s sales on real estate are held on the first Monday of each month starting at 9 am. Although you can theoretically file a bankruptcy case at 8:55 am on Monday to prevent your sheriff’s sale from going forward, you don’t want to be quite that risky and wait that long.
I often receive phone calls from very reasonable and intelligent folks on Wednesday, Thursday or even Friday on the week prior to the Monday sheriff’s sales. They invariably tell me a story in which they had been diligently working with their mortgage company on a loan modification or forbearance agreement, and the mortgage company’s representative abruptly told them that it was longer possible to stop the sale. In other words, the mortgage company had led them to believe that a deal was in the works. And in the last few days, the deal was called off. So, it’s now Wednesday, Thursday, or Friday, and what should they do?
If you find yourself in this situation, well, you want to quickly meet with a bankruptcy attorney. At this point, there’s very little to be done but to file a Chapter 13 bankruptcy case. Moreover, you want to quickly complete your Pre-Bankruptcy Counseling with Consumer Credit Counseling Services. This session can be done over the phone or online and will take about 45 minutes. Have a debit card handy because the fee is $50.
Personally, I prefer to have all of my Chapter 13 cases filed before the last Friday of each month, prior to the sheriff’s sale date on the first Monday of the month. If you are in this predicament, you should want to be prudent as well. Even if you feel confident about working out a loan modification or forbearance with your mortgage company, you should still schedule an appointment with a bankruptcy attorney. It’s one thing if you have already received a written modification or forbearance agreement from your mortgage company. But it’s another if you’re still in the talking stage and nothing has been promised to you in writing. At that point, you need to start to prepare your bankruptcy contingency plan.
As I’ve written before, once you file a bankruptcy case, then the automatic stay is in effect and creditors cannot pursue their collections activities against you. This means that any sheriff’s sale must be cancelled or postponed for at least several months. So, meet with a bankruptcy attorney and work out the details of your proposed Chapter 13 plan so you fully understand it. In many cases, folks who are facing foreclosure have other debt issues as well, and Chapter 13 can help to resolve those problems too.
Call my office if you have any further questions. Feel free to comment too.