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Redemption Rights Post Foreclosure and Chapter 13

Serving Families Throughout Mobile
"Can I get my house back by filing a Chapter 13 bankruptcy case after a foreclosure sale?

The general rule on this issue is that once the hammer of the sale falls, the home is lost forever. There are some limitations on this general rule, however. The State of Alabama has a right of redemption for every mortgage debtor, but this requires full payment of the amount due within strict time perameters. Just recently, the Alabama Southern District Bankruptcy Court held that a Debtor may pay the redemption amount through a 60 month Chapter 13 Plan.

In general, it is best to contact a bankruptcy attorney well in advance of a foreclosure sale, because the filing of a bankruptcy case causes the issuance of an Automatic Stay Order which legally prohibits the lender from selling the home. Keep in mind that you would have to put the entire past-due balance into a Chapter 13 plan, and file the case within the applicable redemption time limitation after the foreclosure sale. Otherwise, there is no other way to regain ownership of your home post-foreclosure other than exercising your redemption rights with cash, or outside funding.

If you have questions about the foreclosure process, or think that bankruptcy may be a good option for your situation, CALL ME. I'll BE there for you.

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