The point of no return for a chapter 13 bankruptcy depends on why you are filing it. Is it just to pay back your debt over time or are you doing it to save your home from foreclosure? It can make a difference. I always tell people not to put off filing if it is your best option, as you are putting off a freash start. But if your home is in foreclosure, you really can't afford to procrastinate.

Bankruptcy to Pay Off Debt

If you are just trying to pay your debts over time for an affordable amount, then there is no real deadline other than to avoid an impending wage execution, bank levy or entry of judgment in a law suit.

The issue with judgments is that they can create a lien against any real estate you own (which for most people is just their home) and increase the cost of your bankruptcy because additional steps need to be taken to remove said lien after you file.

Bankruptcy to Save Your Home

But if you are trying to save your home, there is not an unlimited amount of time. It must be done prior to the sheriff sale. That is the point of no return or "drop dead date."

Once that happens, the only way to keep the home is to pay off the mortgage balance within the 10-day redemption period under New Jersey law, following the sale. Naturally, unless you are trying to conclude a refinancing, that solution is not a very practical one.

The good news is that banks do not go directly to sheriff sale after the foreclosure suit is commenced.  This offers you some time to save the home through a bankruptcy. However, I would recommend that you file as soon as possible, since every month you wait makes the arrearage that much bigger.

So What Do I Do?

So as you can see, you do not have unlimited time to file bankruptcy to save your home. Wait too long, and you will lose it! If you live in Burlington, Camden, Gloucester, Salem or Cumberland County, are behind on your mortgage, and want to try and save your home, don't put it off! Call my office right away at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.

If you are looking for more information about bankruptcy, then download my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey.

Not sure if bankruptcy is right for you? Take the quiz to the right to find out more!

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.