If you’re behind on rent or mortgage payments, the fear of losing your home is very real. Whether you’ve received a notice of default from your lender or a notice of termination from your landlord, it may feel like time is running out. But for many people in this situation, there’s an often-overlooked legal tool that can buy time—and potentially change the outcome: bankruptcy.
At Law Offices of Terrence Fantauzzi, we help California residents explore all available options when they’re facing foreclosure or eviction. In many cases, filing for Chapter 7 or Chapter 13 bankruptcy can trigger an automatic stay, putting a pause on legal proceedings and giving you the time and leverage you need to find a workable solution.
Let’s break down how this works—and when it could apply to your situation.
What Is an Automatic Stay?
An automatic stay is a legal protection that goes into effect immediately after a bankruptcy case is filed. It prohibits most creditors from continuing collection efforts, including:
- Foreclosure sales
- Evictions
- Utility shutoffs
- Wage garnishments
- Lawsuits related to debt
In short, it stops the clock—giving you temporary relief while your case is reviewed.
Using Bankruptcy to Stop Foreclosure
In California, a lender can begin foreclosure proceedings after you’ve missed just three mortgage payments. They’ll start by recording a Notice of Default, followed by a Notice of Trustee Sale. If you’ve received either notice, it’s essential to act fast.
Filing for Chapter 13 bankruptcy can halt foreclosure and allow you to catch up on missed payments over a 3- to 5-year repayment plan. This option is ideal for homeowners with steady income who want to keep their home and reorganize debt.
In some cases, Chapter 7 bankruptcy can delay the foreclosure process temporarily, giving you time to plan or negotiate. However, Chapter 7 does not provide a long-term plan for keeping your home if you can’t stay current on your mortgage.
Using Bankruptcy to Stop Eviction
If you’re renting and facing eviction, bankruptcy can offer short-term protection—but timing is critical.
- If your landlord has not yet obtained a judgment of possession, filing bankruptcy triggers an automatic stay and temporarily stops the eviction.
- If your landlord already has a judgment, the stay may not apply unless you can prove you’re able to pay back rent and remain current going forward.
Filing for Chapter 13 bankruptcy may give you the option to repay back rent over time while keeping your lease. Chapter 7, on the other hand, can pause the eviction briefly but may not allow you to stay in the unit long term.
Keep in mind: A landlord can ask the court to lift the stay, and if granted, they may resume the eviction process. That’s why it’s important to act quickly and work with an attorney who understands how to navigate these complexities.
Which Type of Bankruptcy Is Right for You?
- Chapter 7 Bankruptcy: Offers fast relief by wiping out most unsecured debts. Best for people with limited income and assets. May delay foreclosure or eviction, but does not include a payment plan.
- Chapter 13 Bankruptcy: Allows you to keep your home or rental by creating a repayment plan to catch up on missed mortgage or rent payments. Ideal for individuals with steady income who need time to reorganize.
At Law Offices of Terrence Fantauzzi, we can help you evaluate your financial situation and choose the bankruptcy option that gives you the best chance of keeping your home or avoiding eviction.
Time Is Critical—Get Legal Help Today
Whether you’re behind on your mortgage, facing eviction, or already dealing with foreclosure notices, you have more options than you think—but the clock is ticking. The earlier you act, the more choices you’ll have.
Call (909) 552-1238 today to schedule a consultation with Law Offices of Terrence Fantauzzi. We’ll help you understand your legal rights and determine if bankruptcy could be the key to protecting your home and regaining control of your financial future.