Many times I am asked by potential bankruptcy clients: “How Long Can I Stay in My House if I Filed a Chapter 7 Bankruptcy?”
There is not an exact answer. As part of a Chapter 7 Bankruptcy, the automatic stay provision of the Bankruptcy Code protects the debtor that filed for bankruptcy, at least temporarily, regarding a foreclosure (i.e. it stops a foreclosure). Usually, shortly after filing for Ch 7 bankruptcy, the mortgage company will file a Motion for Relief from Stay in which they ask the Court to lift the automatic stay so that they can generally pursue a foreclosure.
In a Chapter 7 bankruptcy this motion is somewhat of a formality as most debtors generally do not have a defense to the motion and plan to surrender their home at some point. One thing you should be aware of is that the court can award costs and attorney fees to the mortgage company that filed the motion.
Once the motion granted and the stay ifs lifted, the mortgage company can start the foreclosure process again. Depending on where you live this process can take anywhere from a few weeks to a few months.
Although not something you should plan on; in many cases the mortgage company does not file a Motion for Relief from Stay as perhaps they do not want to spend the money to file the motion or they are not ready to foreclose. If the mortgage company does not file a Motion for Relief from Stay, the stay will remain in effect until your case is discharged and closed, which is generally around four months. At that point the stay would terminate and the mortgage company could start the foreclosure process since the discharge was issued.
