“Bank of America to Pay $6 Million to Bankrupt Couple”
“Bank of America Corp. has agreed to pay more than $6 million to a California couple whom a federal judge said had been harassed and illegally foreclosed upon by the bank’s mortgage unit, ending an eight-year-long dispute.” according to foxbusiness.com. After the couple fell behind on their mortgage payments approximately 20 loan modification requests were made and rejected, and then the couple filed a bankruptcy. The filing of the bankruptcy should have halted the bank’s efforts to foreclose on the couple, but instead the stay issued by the bankruptcy court was ignored by the bank and they forced the couple out of their home. Later efforts by the bank to reverse course were deemed to be too little and too late by the court. It is hard to believe that such a sophisticated lender would not comprehend the gravity of violating the Automatic Stay in a bankruptcy case. The automatic stay is interpreted very broadly and forbids creditors from trying to collect money from a debtor outside of the bankruptcy process. The automatic stay is so important to a bankruptcy that the lifting of the stay can make a bankruptcy pointless. If you are facing a foreclosure, it would be wise to talk to a bankruptcy attorney to find out whether a Chapter 13 bankruptcy will allow you to keep your house.