Can you reverse a foreclosure sale after bankruptcy was filed?

A foreclosure case is a legal collection action against the owners, and when a person files bankruptcy, a bankruptcy court order known as the “automatic stay” is issued instantly by operation of federal bankruptcy law, preventing any legal actions from proceeding further against the bankruptcy debtor.  When bankruptcy is filed just before the sale in a foreclosure case, the sale may take place before the bank or the foreclosure court receives notice of the bankruptcy filing. 

Nevertheless, the official who conducts the sale must report the results of the sale to the foreclosure court, which must approve the sale before it is official.  Even in non-judicial foreclosure, the homeowner/debtor has opportunity to file objections in a court to the legal regularity of the sale, and he should raise the automatic stay at this point, as grounds for voiding the sale. 

Any bankruptcy will void the sale under these circumstances, although Chapter 7 liquidation may only delay another sale for a couple of months.  A Chapter 13 reorganization, on the other hand, may stop the foreclosure action from ever being renewed, as this bankruptcy type allows the debtor to pay off debt under a bankruptcy payment plan, over the course of 3-5 years.

Talk to a Foreclosure Defense Attorney to find out is bankruptcy is the right option, or if there is a better way to stop a foreclosure.