Nolo Publishes 50-State Series on Redeeming Your Home After Foreclosure

home on lifeboatAre you in foreclosure or did you recently lose your home to foreclosure? In many states, you have one last chance to get your house back — called redemption. When you redeem your home, you essentially repurchase your home from the person or entity that bought the home at foreclosure. If your state gives you the right to redeem, the purchaser must give you the home back if you pay the correct amount within the redemption time period.

How Does Redemption Work?

To redeem your home, you must:

  • act within the allotted time period (which varies by state), and
  • repay the amount that the purchaser paid at the foreclosure sale, plus certain costs and other fees. In some states you must also reimburse the purchaser for any repairs or maintenance done to the home.

The costs, fees, and other “extras” that you must pay vary by state.

Do You Always Get the Right to Redeem?

No. In some states, once the house is sold at foreclosure, you are out of luck. And in some states other factors affect whether you can redeem — for example, whether the foreclosure was judicial or nonjudicial or whether the loan documents waived the right to redeem.

How Much Time Do You Get to Redeem?

‘The time period in which you must redeem also varies widely by state. You might get 60 days or you might get a whole year.  Often the time period is different depending on the type of foreclosure process used (judicial v. nonjudicial), whether you’ve abandoned the home, or whether the property is agricultural.

How to Find the Redemption Law in Your State?

Nolo recently published a series of articles on whether you can redeem your home after foreclosure. The series covers each of the 50 states, plus the District of Columbia. In your state’s redemption article, you’ll find out whether you have the right to redeem, the redemption time period, the amount you’ll have to pay, any special procedures you must follow, how to find your state redemption statute, and more.

To find your state’s redemption after foreclosure article, go to Nolo’s Getting Your Home Back After Foreclosure topic page and click on your state. You can also find your state’s redemption article, plus other foreclosure articles specific to your state on Nolo’s State Foreclosure Laws topic page (again, click on your state).

Other Options to Get Your Home Back

In every state, you redeem your home before the foreclosure sale (this is called the equitable right of redemption). And you usually have other options available to save your home before the foreclosure sale, many of which are better than redemption. For example, you might be able to reinstate the mortgage by paying past-due amounts plus costs. Or you could try to work out a loan modification, forbearance agreement, or repayment plan with your lender. To learn about your options, see Nolo’s Alternatives to Foreclosure topic page.

Do I Have to List a Debt to My Mom in My Bankruptcy?

Daughter and her upset mother having financial problemsASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Dear Leon, 

I am getting ready to file bankruptcy and am getting conflicting advice about whether I have to list a debt I owe to my mother. 

Over the past six years I have borrowed a total of $50,000 from my mother. We never signed anything, but she expects to be paid back if I am ever able to do so. Beyond that, she has not attached any other conditions. 

My hair stylist, who filed bankruptcy, says I only have to list the debts I can’t pay. I have consulted with two lawyers. One says I must list every debt, including the money I owe my mother. The other says I should list my mother’s debt, but if I don’t, no one will ever know. 

I’m sure you get this question all the time, but it’s a big issue for me. If I list my mother as a creditor, it might appear like I don’t trust her, and it will hurt her feelings. What should I do? 



Dear R.M.,

It’s an excellent question and you are right – I get it all the time. I have probably answered it 30,000 times already will likely answer it another 20,000 times before I go up to the big bankruptcy court in the sky.

The short answer is that you are required to list all of your debts when you file for bankruptcy.

You Must List All Debts in Bankruptcy

You said you “borrowed” money from your mother. That means it’s a debt. When you file for bankruptcy, you must list all of your debts on your bankruptcy papers (called the petition and schedules). Contrary to your hair stylist’s understanding of the law, your bankruptcy schedule of creditors is not a wish list of the debts you want to eliminate. Rather, your bankruptcy papers are a financial statement, and the law requires that they be accurate. If the court finds that your schedules are not reliable or were prepared with no regard to accuracy, your case could be denied.

Case in point: I recently represented a creditor in a Chapter 13 bankruptcy case. I was successful in persuading the court to convert the case to Chapter 7, which is an extreme rarity, by proving that the debtor knowingly submitted materially false bankruptcy schedules. That debtor is now going to lose his house in a forced sale by the Chapter 7 trustee, and my client is going to get paid.

Strategies for Facing Your Mother

That said, I’ll give you some practical strategies that may allow you to do the right thing and prevent hurt feelings and embarrassment.

Let’s face it. Your mom already knows about your money troubles. Your consideration of bankruptcy should be no surprise to her. In fact, she may actually be glad to have you discharge your debts in bankruptcy instead of asking her to pay them.

You may feel better if you talk to mom, and “fess up.” You can explain that you are legally required to list all of your debts, and that the failure to do so can have serious consequences. You can also tell mom that the law allows you to repay debts after bankruptcy.

Your Bankruptcy Might Provide Your Mom With a Tax Benefit

Now, get this. Your mom might actually benefit if you file bankruptcy – it may make her eligible for tax relief by demonstrating that your debt is “uncollectable.”

Here’s how this works. If the debt is discharged in your bankruptcy, she will have what the IRS calls “absolute proof of loss.” In other words, it establishes that she can’t ever collect the debt. See, IRS Publication Topic 453 – Bad Debt DeductionNormally, your mother would have to sue you and make reasonable efforts to force you to pay before deducting your debt as a “bad debt.” But having your debt discharged in bankruptcy allows her to skip those steps. She should speak to a tax advisor to determine if she is eligible for this tax deduction.

One last point: Please tell your stylist to stick to hair, and stop handing out legal advice.


Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

Find Leon on Google+

Worried About Losing Your Wedding Ring or Other Jewelry If You File for Bankruptcy?

ringsMost people who file for Chapter 7 bankruptcy don’t have a lot of expensive jewelry. But many own a wedding or engagement ring, or perhaps another special jewelry item, like great grandma’s ruby ring or grandpa’s cufflinks. And while bankruptcy is often fraught with more pressing concerns (Will I lose my home? Can I get that debt collector to stop hounding me?  What about that huge tax bill?), the possibility of losing your wedding ring, heirloom jewelry, or even just a special watch, necklace, bracelet, or pair of earrings can add more mental stress to the process.

Nolo’s New 50-State Series on Your Jewelry in Bankruptcy

So what does happen to those jewelry items when you file for Chapter 7 bankruptcy? As you’ll see below, the answer depends on where you live (or more accurately, which state bankruptcy exemptions you can use).  We outline some of the common ways that states allow you to keep some, or all, of your jewelry. But even more helpful is Nolo’s recently published 50-state (plus the District of Columbia) series on what happens to jewelry in your state.

Exemptions and Jewelry in Bankruptcy

In Chapter 7 bankruptcy you must give up certain items of property. The bankruptcy trustee sells this property and uses the proceeds to repay (at least in part) your unsecured creditors.

Not all of your property is up for grabs, however. (In fact, most Chapter 7 bankruptcy filers give up little or no property.) Each state plus the District of Columbia has enacted laws that protect certain types of property. These laws are called exemptions. Some property is exempt no matter what the value, and other property is exempt only up to a dollar amount. The idea behind exemptions is that someone filing for bankruptcy should not be stripped of basic things needed for living – like shelter, clothing, furniture, a car, and the like. (Learn more about how bankruptcy exemptions work.)

Some states allow you to choose between a set of state exemptions and the federal bankruptcy exemptions. Others only allow you to use state exemptions.  (Find out which bankruptcy exemptions you can use.)

Common Exemptions That You Can Use to Protect Jewelry

The exemptions that are available to you vary by state. Below are some of the types of exemptions that your state might have that you can use to protect jewelry.

Wedding and anniversary ring exemption. Many states allow you to keep wedding and engagement rings, no matter their value. Others put a dollar limit on your wedding ring. Still others don’t have a special exemption for wedding rings.

Jewelry exemption. Some states have a specific exemption that allows you to exempt jewelry up to a certain dollar amount. Some states can be quite generous in this exemption.

Heirloom exemption. Some states have an exemption for family heirlooms – sometimes to an unlimited value and sometimes up to a certain dollar amount. You may be able to use an heirloom exemption to keep jewelry that has been passed down to you from family members.

Wearing apparel exemption. Many states specifically state that you can keep your wearing apparel, often to an unlimited value. Some state bankruptcy courts have ruled that a debtor can exempt a moderately-priced watch, cufflinks, or other modest jewelry item under the wearing apparel exemption.

Wildcard exemption. A wildcard exemption allows you to apply a certain dollar amount to any type of property. If your state has a wildcard exemption (such exemptions can range from as little as $200 to as much as $25,000), you most likely can apply some or all of it to your jewelry.

Find the Jewelry Exemptions in Your State

To find the specific exemptions that relate to jewelry in your state, go to Nolo’s State Bankruptcy Information page and choose the link to your state. You’ll see a list of articles related to bankruptcy in your state, including an article on keeping jewelry.

Maryland Banks Have 3 Years to Sue Foreclosed Homeowners, Not 12

Lady justice on top of a snailThe Maryland legislature just significantly shortened the time period in which banks can sue foreclosed homeowners for a deficiency. Under a loophole in the old law, banks often had 12 years to pursue foreclosure homeowners for unpaid mortgage debt. Starting July 1, 2014, they’ll  have to do it within three years.

What Is a Deficiency After Foreclosure?

If you lose your home through foreclosure in Maryland, it’s very possible that the foreclosure sale proceeds won’t be sufficient to cover the mortgage debt owed.

Example. Say your home, in the current market, is worth $200,000. But when you bought it ten years ago, it was worth much more. You still owe $250,000 to your mortgage lender. If the home is sold after foreclosure, and the price fetched is $200,000, you’ll still owe the lender $50,000 in mortgage debt. This is called a deficiency.

Some states don’t allow mortgage lenders to go after foreclosed homeowners for a deficiency. But in Maryland, the lender can sue you for a deficiency. Learn more about deficiency judgments after foreclosure in Maryland.

Statute of Limitations for Deficiency Actions in Maryland

The statute of limitations is the time period in which you must bring a lawsuit. If you don’t sue within the statute of limitations, you are barred from suing in the future.

Maryland has a specific statute of limitations law that applies to deficiency judgments after foreclosure. Under that law, the bank has three years from the foreclosure to file a lawsuit to collect the deficiency. But there’s a loophole in another part of Maryland’s statutes. A different law states that a creditor can pursue a deficiency based on a promissory note as long as it does so within 12 years.

The Maryland legislature sealed that loophole. The new law, which will become effective on July 1, 2014, specifically states that the 12-year statute of limitations for promissory notes does not apply to a deficiency based on a deed of trust, mortgage, or promissory note for a residential home. The three-year statute of limitations, therefore, will apply.

Getting Rid of Private Student Loans in Bankruptcy: Will Congress Change the Law?

Processed by: Helicon Filter;A bill that would allow people to wipe out private student loans in bankruptcy might be gaining momentum in Congress.  Although the Private Student Loan Bankruptcy Fairness Act of 2013 (H.R. 532) has been kicking around since January 2013, recent activity indicates that some representatives in Congress are still interested in leveling the playing field between private student loan lenders and borrowers. But unless the bill becomes law, the private student loan industry will continue to have their cake, and eat it too.

The History of Private Student Loans in Bankruptcy

Before 2005, bankruptcy law treated private student loans just like other unsecured debt such as credit card debt and medical bills. This meant that if you filed for bankruptcy, in most cases you could discharge all of your private student loan debt. (There were a few exceptions, for example if you engaged in fraud.)

That all changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In one fell swoop, Congress lumped private student loans together with federal student loans. That means that if you file for bankruptcy today, you can only discharge private student loans if you prove that repaying the debt would cause you an undue hardship. This is a very difficult standard to meet. (Learn more about the undue hardship test for student loans.)

Why Private and Federal Student Loans Should Not Be Lumped Together

Federal student loans and private student loans are very different. If you apply for a federal student loan, the government does not take into account your credit history or ability to repay the loan (with one exception – you cannot get a federal PLUS loan if you have an adverse credit history). Nor do those factors affect your interest rate. Because interest rates are capped for federal loans, even if you are a very poor credit risk, the government cannot assess more than the capped rate. Interest rates for federal student loans are often much lower than the average interest rate attached to private student loans.

Private student loan lenders, in contrast, function like other unsecured creditors. Like credit card companies, private student loan lenders can choose to lend to you, or not. If you have bad credit, they’ll hedge their risk by charging you a very high interest rate.

Federal and private student loans are different when it comes to repayment as well. Borrowers of federal loans can avail themselves of a number of flexible repayment plans. These programs allow borrowers to stretch out payments, reduce monthly payments to an amount based on income, wipe out portions of debt by working in certain fields, and more. In some cases, borrowers can pay little to nothing for many years, and then have the remaining debt forgiven. (Learn more about the various repayment programs for federal student loans.)

If you have private student loans, none of these programs are available to you. If you are struggling to make monthly payments, you can try to work something out with your lender. But there’s nothing that will force the lender to negotiate with you. If you want to reduce your payment, stretch out payments, get a lower interest rate, or the like – good luck.

It doesn’t seem fair that private student loan lenders get special treatment in bankruptcy. We don’t provide the same privileges to other lenders, like car loan lenders or credit card companies. So private student loan lenders can charge extremely high interest rates, refuse to lend to people with poor credit histories, require cosigners, but still get protection from discharge in bankruptcy. Essentially, they can have their cake and eat it too

Is Congress Catching On?

In 2013 representative Cohen, along with 14 other congress members, introduced the Private Student Loan Bankruptcy Fairness Act (H.R. 532). HR 532 would remove the special treatment that private student loans currently get in bankruptcy, and put them on the same level as other unsecured creditors. If this bill became law, bankruptcy filers would be able to discharge private student loan debt in bankruptcy.

Sounds great. But unfortunately, according to, the bill has a 2% chance of becoming law (ouch).  Which is not surprising, given the track record of Congress of late. Plus, it’s been sitting around since January of 2013.

A Glimmer of Hope?

It may be too early to give up though. In March (in large part due to some effective pushing by members of the National Association of Consumer Bankruptcy Attorneys) an additional five representatives joined as cosponsors (bringing the tally to 39 in all).  Does this mean the bill is gaining momentum? Let’s hope so.

Banks Avoiding New California Foreclosure Protections?

FinalNoticeIStockAlmost a year and a half ago California’s Homeowner Bill of Rights went into effect. HBOR, as it’s often called, provides more protections to California homeowners in foreclosure. The goal of the law is to prevent some of the mortgage servicer abuses that plagued homeowners in previous years. But according to recent statistics from RealtyTrac, some banks are dealing with the new protections in HBOR by avoiding them altogether.

The California Homeowners’ Bill of Rights

HBOR, which became effective on January 1, 2013, requires banks and mortgage servicers to follow some new rules in nonjudicial foreclosures. (The nonjudical part is key – more on that later.)  A few highlights:

No dual tracking. If the homeowner submits a loan modification application, the servicer cannot start or continue with foreclosure until it’s made a decision on the application. Even if it denies the application, it must wait to foreclose until the appeal deadline has passed.

Single point of contact. Mortgage servicers must assign homeowners who are in foreclosure or seeking a loan modification with a single point of content – one person or team of people who have knowledge about the homeowner’s file and are responsible for the flow of information between the homeowner and servicer decision-makers.

Penalties and damages for violations . If a servicer files unverified documents (the practice of “robosigning” which was a major problem a few years ago), it may be on the hook for a $7,500 civil penalty. And if it violates HBOR, the homeowner can halt the foreclosure, or if it’s already gone through, sue for damages. These rules create more work for the mortgage servicers, slow the process down, and expose the lender to potential liability for missteps. (Learn more about the new requirements of HBOR for California foreclosures.)

Judicial v Nonjudicial Foreclosures in California

Here’s the key to the banks’ recent “workaround” when it comes to HBOR. HBOR rules only apply to nonjudicial foreclosures in California. In a nonjudicial foreclosure, the bank can foreclose on the homeowner without going through the courts. In contrast, in a judicial foreclosure, the bank must file a foreclosure lawsuit in court, follow the required litigation procedures, and get a court judgment before it can sell the home.

Judicial Foreclosures Have Spiked

In the past, most banks in California used the nonjudicial foreclosure process – it was easier and faster.  But not so in recent months.  According to RealtyTrac, in the first three months of 2013, banks filed just one nonjudicial foreclosure in California. Compare that to one year later (after HBOR had been kicking around):  in the first three months of 2014, banks filed 1,396 judicial foreclosures.  This is out of a total of 20,228 foreclosure starts during the same period. So while the majority of new foreclosure cases are still nonjudicial, the number of judicial foreclosures has certainly spiked to unprecedented numbers for California.

The judicial foreclosure process takes longer, but some mortgage lenders and servicers feel that avoiding the new HBOR requirements and eliminating the uncertainty of liability for civil penalties and economic damages is worth the extra time.

Biggest Payday Loan Rip Offs: Idaho, South Dakota, Wisconsin, and Nevada

Customer service satisfaction surveyThe Pew Charitable Trusts recently released a study of payday loan rates across the country. While payday loans are exorbitantly expensive wherever they are allowed (15 states don’t allow them), a number of states have incredibly high average rates.  Those states and their average interest rates on payday loans are:

  • Idaho – 582%
  • South Dakota and Wisconsin – 574%
  • Nevada – 521%
  • Delaware – 517%
  • Utah – 474%

Notably, none of these states have laws that cap the amount of interest that payday loan lenders can charge. Rates in these states are often double those in states that do a better job of regulating the payday loan industry. (If these numbers aren’t sufficient to make you run the other way, read more about why you should avoid payday loans.)

Competition Does Not Bring Rates Down

The Pew study also found that competition does nothing to bring rates down. Those states with the highest rates also often had the highest number of payday loan storefronts.

To get information about the study results, check out the Pew Charitable Trust’s Fact Sheet:  How State Rate Limits Affect Payday Loan Prices.

Preventing World War III: What Happens If Your Ex Gets a Tax Bill After You File for Bankruptcy?

Tax Return 1040ASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Hi Leon,

My domestic partner and I used to own a house together — we were both on the first mortgage and second mortgage home equity loan. We split up, and she transferred her share of the house to me in a settlement agreement. She remained on the mortgages because the lender would not take her name off and I couldn’t refinance in my name only because the home had no equity.

Eventually, I filed personal bankruptcy and lost the home in foreclosure to the first mortgage holder. The second mortgage holder forgave the debt on the second mortgage and then issued an IRS 1099 to my ex-partner. The second mortgage holder would not issue a 1099 to me because it said I am protected by the bankruptcy.

My ex is now trying to get me to pay her income taxes. She has contacted a lawyer who is trying to get the loan file from the lender.

Can you think of some way to unwind all this craziness before it erupts into World War III with litigation and big lawyer fees? 

Many thanks and have a good evening.



Dear Diane,

Most likely, you have no legal obligation to repay your ex for any income taxes she might owe. If that’s the case, she may be in violation of the bankruptcy’s discharge order if she comes after you. A simple reminder of that (from a lawyer) will hopefully stem World Word III.

And your ex might not even owe income tax on the forgiven mortgage debt. If that’s the case, there would be no reason for her to even start World War III.

No Tax on Forgiven Debt If Your Ex Was Insolvent

As you and your ex are aware, the IRS treats forgiven mortgage debt as income. That’s why the mortgage lender issued the IRS 1099 to your ex.

However, if your ex was financially insolvent in the year that the debt was forgiven, she won’t have to pay any income tax on that debt. If she can establish that (she should consult with a CPA), she may be able to amend her tax return so that she doesn’t owe the extra tax. (I hope it is not too late for her to amend her return, assuming she was insolvent.)

What does it mean to be insolvent? To determine if she was insolvent at the time, she would add up the value of her assets and compare that number to the amount of her outstanding debts, including the old second mortgage. If her debts were greater than her assets, then she was insolvent. Here is the link to the IRS Publication explaining all of that in simple language. I suspect she had no significant assets? If so, she should be “home free.” (Nice pun?)

Another Way to Avoid Tax on Forgiven Mortgage Debt?

Depending on what you and your ex used the second mortgage for, she also might be off the hook for the tax.  Congress created an exception to the mortgage forgiveness tax if you used the mortgage money to purchase or improve your home. If that’s the case, you don’t have to pay tax on the forgiven debt.  (Learn more about the Mortgage Forgiveness Debt Relief Act.)

But here’s the catch:  That exception ended on December 31, 2013. If your second mortgage lender forgave the debt 2013 or before, and you used the money to improve your home, your ex is probably off the hook.

If the debt was forgiven in 2014, it’s still possible (some say likely) that Congress will extend the mortgage forgiveness tax exception through 2017, and make the extension retroactive.

You Are Not Liable for Taxes on the Forgiven Debt

It was legally correct for the lender to issue the 1099 to your ex instead of to you. That is because your bankruptcy got rid of your personal liability for the debt on the second mortgage, so there was no debt to forgive. It is actually refreshing that hear that the lender is following the law (for a change).

Do You Have to Reimburse Your Ex for Any Extra Taxes She Has to Pay?

But even though you don’t owe taxes to the IRS, must you reimburse your ex for any taxes she has to pay to the IRS? It’s likely your domestic settlement agreement says yes, but, as we discuss below, your obligation to her was probably discharged in your bankruptcy.

Your domestic settlement agreement. A domestic settlement agreement will usually operate just like a marital settlement agreement. It divides up all of your joint assets, and assigns responsibility between each of you for payment of joint debts. Because you kept the house, the agreement probably required you to pay the mortgages and hold your ex harmless from the mortgages and any other debts assigned to you.

But any obligation to reimburse your ex was probably discharge in the bankruptcy. Here’s why.

If You Listed Your Ex in Your Bankruptcy

You should have listed your ex as a creditor in your bankruptcy because she was the co-obligor on your mortgage debts. If listed, your liability to her may have been discharged in the bankruptcy (assuming the debt was dischargeable, see below).

If You Didn’t List Your Ex in Your Bankruptcy

Even if you didn’t list your ex in your bankruptcy, you’re probably still OK. The bankruptcy law says that unlisted debts are also discharged provided a few conditions are met:

  • the unlisted debt was the type of debt that would be normally be dischargeable, and
  • the bankruptcy was a “no asset bankruptcy case.”

Dischargeable debts in Chapter 7 are generally anything except most kind of taxes, student loans, family support, and debts arising from intentional misconduct.

A no asset case means the court never set a deadline for creditors to file claims because there was no money to be distributed. Most Chapter 7 bankruptcies are “no asset” cases, and it is a fair assumption that yours was, too.

Was the Debt Arising From Your Domestic Settlement Agreement Dischargeable? 

Normally, obligations arising from a divorce or separation agreement are not dischargeable in bankruptcy. (See the list of debts that are not wiped out in Chapter 7.) But, this is only if the agreement was made with a spouse, a former spouse, or child.

But since you called your ex your “partner” I assume you were not married. If so, that is a good thing for you in this case. You can discharge your obligations under the domestic settlement agreement because you did not make the agreement with a spouse or former spouse.

In summary, any obligation to hold your ex harmless from the mortgage debts was dischargeable in your bankruptcy provided that:

  • she was not your spouse, and
  • the claim was listed in your bankruptcy, or if not listed, your bankruptcy was a “no asset” case.

Preventing World War III

If your ex lawyers up and comes after you to pay her tax debt, she may be held in contempt of the bankruptcy court’s discharge order. A creditor cannot pursue collection of a debt that has been discharged in bankruptcy.

A well written “lawyer letter” defending your position should be enough to make the other side back down. See if your former bankruptcy lawyer can help you with that, or find one right away who can do that for you.


Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

Find Leon on Google+

Will My Name Be in the Newspaper If I File Bankruptcy?

Pub_Notice_in_NewspaperASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Dear Leon, 

I am getting ready to file bankruptcy. Obviously, it is something that I am not proud of. Some people have told me that I will have to publish a notice in the newspaper saying that I have gone bankrupt. That would be embarrassing. Is there any way I can get around it? 



Dear Jack,

Don’t worry. There is no such requirement in modern American bankruptcy law. However, there was a time in legal history when such a notice was required. Perhaps that is the reason some people think that a bankruptcy notice has to be published. Actually I get this question quite often.

A Bit of Bankruptcy History

In 1712 the British Parliament passed “An Act to Relieve Insolvent Debtors.” One feature of that law imposed a legal requirement to print a notice in a newspaper advertising the meeting of creditors in every bankruptcy case.

The reason behind the requirement was not to shame the person filing. Instead, it was to prevent secretive proceedings for the benefit of insiders seeking to defraud other creditors who had not received notice.

The publication rule was a great benefit to newspapers, who charged for printing the notices as advertisements. The most prominent of such papers is the London Gazette, which is the first newspaper to be regularly published in London, and is still in business.

No Publication of Bankruptcy Filing 

Unless you are a celebrity or a public figure (in which case the gossip magazines will be sure to talk about your filing), I’m pretty sure no one will care about your bankruptcy nor will it appear in any newspaper or magazine.

Of course, future lenders and creditors will care, and will see it on your credit report.  But you can take steps to rebuild your credit after bankruptcy in order to minimize its impact.


Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

Find Leon on Google+

Use It or Lose It: The Automatic Stay in a Third Bankruptcy Case

1_2_3ASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Dear Leon, 

I need to file a bankruptcy case to stop the foreclosure of my home. But there’s a catch. I already filed two Chapter 13 bankruptcy cases in the past ten months and both were dismissed. The first because of some bad advice I got. The second because I

found out too late that I needed to file a motion to continue the protection of the automatic stay within 30 days. 

The foreclosure is back on track and I need to stop it so that I can save my home. I’m handling the bankruptcy on my own.

So here’s my question. Since I didn’t use up my right to file a motion to continue the stay in the second bankruptcy, can I file another Chapter 13 case and also file the motion? It seems to me that my right to file the motion is preserved because I haven’t exercised it yet. 



Dear Grace,

You don’t preserve your right to ask the court to continue the automatic stay by not using it. It’s a “use it or lose it” right during bankruptcy case number two. However, you may be able to get the court to impose a stay as to your lender in the third bankruptcy. Whether this will work depends on how much time you have before your home is foreclosed.

Here’s a bit more about repeat bankruptcy filings and the automatic stay.

The Automatic Stay in Your First Bankruptcy Case

As you correctly understand, only the filing of your first bankruptcy case created an automatic stay. Under the automatic stay, most creditors must stop collection activities during your bankruptcy. That automatic stay encompasses foreclosures – so your lender had to stop the foreclosure proceedings when you filed the first case. (To learn more, see Nolo’s article Bankruptcy’s Automatic Stay.)

The Automatic Stay in Your Second Bankruptcy Case

If you file a second bankruptcy case within one year from the filing of the first, the automatic stay only lasts 30 days. The court can extend the 30 days, but you have to file a motion asking the court to do so. In order to get the extension, you have to convince the court that you filed your second case in good faith as to creditors you are trying to encompass under the extension.

The court will only grant such an order during the first 30 days of case number two. This doesn’t leave you much time (as you found out). Experienced bankruptcy lawyers normally file an emergency motion to extend the stay on the same day as the second case is filed. Doing that provides the best chance of having the court consider the motion before expiration of the deadline.

The Automatic Stay in Your Third Bankruptcy Case

If you file for bankruptcy a third time within one year, the automatic stay doesn’t kick in at all. You can, however, ask the court to impose the automatic stay. Again, you’ll have to do this by motion and you’ll only have 30 days to get the order.

If you haven’t yet filed your third bankruptcy case, consider talking to a bankruptcy lawyer. An experienced lawyer may be able to file the motion requesting the automatic stay along with your bankruptcy case, and get the motion heard before 30 days have passed.  You’ll have to convince the court that you haven’t filed your third case in bad faith. (Learn more about the automatic stay in repeat bankruptcy filings.)

Whether this strategy will work depends on when the foreclosure sale is scheduled.  If the sale is scheduled to take place in less than 30 days, you’ll be out of luck.


Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

Find Leon on Google+