Filing For Bankruptcy


Everyone at some point in time has heard of, or discussed the reasons and rationale one might have for filing for Bankruptcy protection. “Bankruptcy” is the formal filing of a Petition for relief from outstanding “Unsecured” Debt in Federal Court (“Bankruptcy Court”). Upon filing of the Petition, all collection efforts by Creditors, including foreclosure proceedings come to a screeching halt and by Operation of Law must cease. Once in Bankruptcy Court you must list your House or Home as an asset, and if encumbered it would then be categorized as a “Secured Debt”. Being a “Secure Debt” the Bankruptcy Court will not provide relief from the Mortgage and eventually, as is usually the case at the request of the Bank or Lende,r the Bankruptcy Court will “lift the stay” on your Property and the foreclosure proceedings will re-commence.

One very interesting application of a “Quiet Title” Action is that it may proceed in Bankruptcy Court as an “Adversary Proceeding” eventhough it was instituted before the filing of the Bankruptcy Petition, or you may even initiate one within and during the Bankruptcy case. Either way the determination of you “Quiet Title” case and or Claim will then be decided by a Bankruptcy Judge, who have traditionally been more favorable towards Homeowners.


Probably the greatest disadvantage of Bankruptcy is that it tarnishes your Credit rating to no end. For up to 7 and possibly 10 years it will remain on you Credit rating and have significant consequences in you future. However many financial Institutions, some Banks, and other major Corporate entities view Bankruptcy as a way or cost of doing business and have no sham at all in filing for relief to the detriment of a large number employees, vendors etc.

Secondly, with regard to you House or Home, for the most part, it serves as a temporary fix. Why ? Because your Property if possessed with a Mortgage and is that type of Debt mentioned earlier as one which is Secured”. Keep in mind that at any time you can choose to dismiss or withdraw you Petition if your situation sees fit to do so. This may be a strategy that best suits you given your situation.

Lastly; there are three (3)  Bankruptcy Chapters  that you might possibly avail yourself of “Chapters 7; 11; and 13”. Which one suits you in your given situation, and that which you might take advantage of, would be better left between you and a qualified and competent Bankruptcy Lawyer. Well before you consider traveling down the road of Bankruptcy, consult with a BK Lawyer, and educate yourself long before you make the decision. This is probably the best thing you can do for yourself if you are truly considering a Bankruptcy filing.