Whether you are filing bankruptcy on your own behalf, or if you have chosen to hire a paralegal you should be wary. There are many intricate nuances to the bankruptcy code that an individual debtor or a paralegal will not be able to navigate. One wrong misguided step could cost you dearly.
Case in point – the weekend before Christmas our office was receiving frantic calls on our emergency line from a debtor whose lender had foreclosed on his home a couple of days after his Chapter 13 case had been filed. He said that he was representing himself (although I believe that he was getting help from a paralegal). The man was desperate to save his home that had already been foreclosed on, and when he spoke to the lender they said that they had a right to foreclose. After looking into this problem for him it came to light that he had two prior cases that were dismissed in the same year as the most recently filed Chapter 13 case. This meant that the bank was correct and that the foreclosure was valid.
When a bankruptcy case is filed the debtor is protected by a federal shield called the automatic stay. The automatic stay was created to protect debtors from any and all collection attempts including (but not limited to) pursuing a lawsuit, foreclosing on a home, garnishing wages, and even calling or writing letters to collect on a debt. This protection comes into existence automatically when a bankruptcy case is filed and is taken very seriously by judges, but it is not without limitations. The code contains provisions which in some cases weaken the protections for the debtor.
One such limitation is when a debtor files multiple cases within one year. If the debtor had one case that was previously dismissed then their second case within the same year will only have an automatic stay for 30 days unless certain steps are taken. If the debtor had two or more cases that were dismissed then the next case filed in the same year will have no automatic stay at all unless proactive steps are taken and the Judge orders a stay into effect.
Therefore, when attempting to use the bankruptcy code to save a piece of real property make sure that you consult with an experienced bankruptcy attorney who can properly advise you. If you have proper help you can ensure an outcome that does not result in the loss of assets. The attorneys' fees are usually more affordable than people think, especially before any problems arise in a case filed without an attorney.