Bankruptcy Can Stop Your Hawaiʻi Foreclosure
A repayment plan to catch up and keep your home.
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How does bankruptcy stop a foreclosure in Hawaiʻi?
The moment I file your bankruptcy, a federal injunction (a binding legal order) called the automatic stay immediately halts the foreclosure, including a scheduled sale, whether it is judicial or nonjudicial. To keep your home for the long term, Chapter 13 lets you catch up on the past-due balance over three to five years while resuming your regular payments.
When Should You Consider Bankruptcy to Stop a Foreclosure?
Bankruptcy is worth considering when you are behind on your mortgage and cannot catch up on the past-due amount in one lump sum. If you could keep up with payments once the balance is spread out over time, bankruptcy can make that happen.
The same is true if you have fallen behind on condominium or homeowners association dues, because in Hawaiʻi an association can foreclose for unpaid maintenance fees just as a mortgage lender can. An association can foreclose on its own claim against the unit without waiting for the mortgage lender, so a unit can be at risk even while the mortgage is current. My guide to HOA and condo fees in bankruptcy covers how these debts work in both chapters.
Hawaiʻi foreclosures are either judicial, meaning the lender or association goes through court, or nonjudicial, by power of sale, which can move faster. If you were served with a lawsuit, your foreclosure is judicial. If you received notices of a sale with no court case, it is nonjudicial. Either way, a bankruptcy filed before the sale stops it.
Some common signs it is time to call:
- You have received a notice of default and intention to foreclose.
- An auction or sale date has been set.
- Your lender will not offer terms you can actually afford.
- You are using credit cards and savings just to stay afloat.
Bankruptcy can also help even if you have decided to let the home go. It can wipe out other debt and any shortfall the mortgage lender might otherwise pursue after the sale (called a deficiency). Association fees follow their own rule: what you owe the association up to the day of filing can be wiped out, but fees that come due after a Chapter 7 is filed stay your responsibility for as long as your name is on the unit. A completed Chapter 13 plan can erase those later fees too.
If you are months behind and waiting on a loan modification that has not come through, it is worth learning what bankruptcy can do before your options narrow.
Once a foreclosure is filed or recorded it becomes public, and the letters start: investors offering to buy your home, and companies promising to stop the sale for a fee. Before you sign anything or pay anyone, find out what bankruptcy can do for you. That is what the free consultation is for.
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How Bankruptcy Stops a Foreclosure
Bankruptcy stops a foreclosure through two tools: the automatic stay and the Chapter 13 plan. The difference decides whether you keep the home.
- The automatic stay. The moment I file your bankruptcy, a federal injunction immediately halts the foreclosure, including a scheduled sale, whether it is judicial or nonjudicial.
- Chapter 13 can save the home. Your plan can repay the past-due balance over three to five years while you resume your regular mortgage payments. Keeping up with both is what saves the house.
- Chapter 7 usually only delays it. Chapter 7 stops a sale but gives you no way to catch up on missed payments. For most homeowners behind on the mortgage, it postpones the foreclosure rather than ending it. It can still be right if you are current and need to clear other debt.
At the end of the plan there is a formal step to confirm with the lender that the mortgage is current, so the case closes with the loan where it should be. If a plan fails partway, the foreclosure can pick up where it left off, so the plan has to be one you can actually live with.
Chapter 13 also works if you decide to sell. The stay stops the auction and gives you breathing room to sell the home at market price and keep the equity the law lets you protect, instead of losing it at a foreclosure sale.
One plan payment covers more than the mortgage. Credit cards, medical bills, and personal loans are paid through the same plan with no interest, and often only in part. The same plan can sometimes lower a car payment and spread out back taxes. My guide to Chapter 13 bankruptcy in Hawaiʻi covers each of these.
In my experience, filing Chapter 13 to stop a foreclosure often prompts the lender to send a loan modification application, even to homeowners who were denied a modification in the past.
An auction is not always the end. In a Hawaiʻi judicial foreclosure the sale is not final until a judge confirms it, so a bankruptcy filed after the auction and before that confirmation can still stop the transfer, and in that window days matter. A nonjudicial power of sale foreclosure is different: it has no confirmation step, so once that sale is done there is normally nothing left to stop. Either way, call before the sale if you possibly can.
One caution. If you have had a bankruptcy case dismissed within the past year, the protection can run out after thirty days, and if two or more were dismissed in that year it may never start at all. Keeping it takes a motion, and the hearing has to happen inside those first thirty days, so this cannot wait. Tell me about any prior filings at the start.
Serving Every Island
I represent homeowners on Oʻahu, Maui, Kauaʻi, Molokaʻi, Lānaʻi, and the Big Island. Every Hawaiʻi bankruptcy is filed in a single federal court in Honolulu. I handle it there for you, by phone or video, evenings and weekends included.
Why Homeowners Facing Foreclosure Contact Me
- You work with me directly. From your first call to the end of your case, I handle it myself.
- Debt relief is all I do. That includes using Chapter 13 to stop foreclosures and help people keep their homes.
- Flat fees whenever I can, and affordable payment plans. You know how the fee works before you commit, and I can usually get you started right away.
- Every island, by phone or video. I work with homeowners statewide, evenings and weekends, with no trip to Honolulu.
- Fast action when a sale is close. If a sale date is bearing down, I move quickly to file. One requirement to know about: before a case can be filed, the law requires a short credit counseling session from an approved agency. It takes about an hour and can be done online, but a case filed without it usually cannot go forward.
Worried about losing your home? Let's talk.
Tell me where you are in the process and I will give you a straight answer on whether bankruptcy can stop your foreclosure and help you keep your home. No cost, no obligation.
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Every case is different and individual results vary.
Common Questions
Can bankruptcy really stop a foreclosure in Hawaiʻi?
Yes. The moment I file your bankruptcy, a federal injunction called the automatic stay stops the foreclosure, including a scheduled auction. It applies whether your foreclosure is judicial or nonjudicial.
Can bankruptcy stop a condo or HOA foreclosure in Hawaiʻi?
Yes. In Hawaiʻi an association can foreclose for unpaid fees just as a lender can, and the automatic stay stops an association foreclosure the same way the moment I file. What happens to the fees themselves depends on the chapter, and my guide to HOA and condo fees in bankruptcy walks through it.
Will I lose my home if I file bankruptcy?
Not necessarily. Filing stops the foreclosure right away, and Chapter 13 lets you catch up on the past-due balance over three to five years while you keep up your regular payments. Keeping up with both is what saves the house, and at the end of the plan there is a formal step to confirm with the lender that the mortgage is current.
Which is better for saving my home, Chapter 7 or Chapter 13?
Chapter 13. It lets you spread your past-due mortgage payments over three to five years while you resume your regular payments, so you can keep the home. Chapter 7 usually only delays a sale and does not let you catch up, so by itself it usually does not save a house. My side-by-side guide to Chapter 7 vs. Chapter 13 in Hawaiʻi goes deeper.
How late is too late to stop a foreclosure?
It depends on which kind of foreclosure you are in. In a Hawaiʻi judicial foreclosure the sale is not final until a judge confirms it, so a bankruptcy filed after the auction and before that confirmation can stop the transfer. A nonjudicial power of sale foreclosure has no confirmation step, so once that sale is done there is normally nothing left to stop. Filing earlier always gives you more options. Call before the sale if you possibly can.
How much does it cost to stop a foreclosure?
Bankruptcy has two costs: the court filing fee and the attorney fee. I work on a flat fee whenever I can and offer affordable payment plans. In Chapter 13, court-approved fees can be paid partly through your plan, and in most cases the majority of my fee is paid that way. I explain how the fee works at a free consultation, before you commit. My guide to what bankruptcy costs in Hawaiʻi breaks down the rest.
Do you handle foreclosure defense or loan modifications?
No. I help with foreclosure only through bankruptcy. I do not litigate foreclosure defense or negotiate loan modifications or mediation. If bankruptcy is the right way to stop your foreclosure, I am here to help.
Chapter 13 is the chapter that lets you catch up and keep your home. If that sounds like your situation, read my full guide to Chapter 13 bankruptcy in Hawaiʻi.
Not sure if bankruptcy is your answer?
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This page is provided for informational and educational purposes only. It does not constitute legal advice and does not establish an attorney-client relationship. Foreclosure and bankruptcy law are highly fact-specific, so please contact my office for guidance on your situation. The information is current only as of its publication, and errors or omissions are possible.
Contact the Law Office of Martin Berger
Law Office of Martin Berger
Serving clients across Hawaiʻi.
Phone: (808) 468-7000
Web: www.martinbergerlaw.com
Office (by appointment, including evenings and weekends): Eaton Square, 438 Hobron Lane, Penthouse 1, Honolulu, HI 96815
Mailing address: PO Box 498, Honolulu, HI 96809
We are a debt relief agency. We proudly help people file for bankruptcy under the U.S. Bankruptcy Code.