A legal declaration of an individual or organization's inability to pay their creditors. This legal declaration severely impacts a person’s credit and their ability to borrow money. Protections, in the case of homeowner bankruptcy filings, place automatic stays on all debt collection actions, including foreclosure. Bankruptcy does not stop foreclosure, it does delay the sale of the property until the homeowner resolves the debt, or in most cases, the lender gets approval from the bankruptcy court to continue the sale (see Order Granting Motion for Relief From Stay). As a secured debt, the lender has the right to take the security (property) if the homeowner lacks the ability to pay the debt as agreed. Bankruptcy is only an effective tool against foreclosure if the homeowner will have sufficient income to pay their home loan and make up past due amounts once the bankruptcy plan is completed.
▪ Chapter 7 - "Debtor Wipeout" The court oversees the liquidation of the debtors' non-exempt assets, distributing the cash proceeds proportionally amongst their creditors.
▪ Chapter 11 - This is a business reorganization proceeding.
▪ Chapter 13 - "Debtor Workout" This is the almost automatic choice of most trustors seeking to use a bankruptcy filing to delay the inevitable trustee's sale as long as they can. The purpose of this proceeding is to give a "wage earner" time for rehabilitation, a temporary respite free from the collection efforts of creditors.

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Frequently Asked Questions
What we do during the "Reinstatement Period"?

All American Foreclosure Service will review and forward a copy of the Trustee Sale Guaranty we order from the Title Company, to see who has a recorded interest in the property as owner or as lien holder; check for bankruptcy and ensure proper notice to the Trustor and subsequent owners or junior lien holders. Within 10 days we are required to mail a copy of the Notice of Default to the Trustor and those who have recorded a Request for Special Notice and within 30 days we send a copy of the Notice of Default to any junior lien holders and other parties. Upon expiration of the 3 month reinstatement period, we proceed to set a Trustee Sale.

Foreclosure Statistics
2009 To 2014 Foreclosure Statistics for San Luis Obispo County, California

This document details the number of Notice of Defaults, Notice of Sales, and Trustee's Deeds filed in San Luis Obispo County, CA from January 2009 through 2014. For review of data prior to 2009 please contact our office.

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