What You Can and Cannot Do After Filing Bankruptcy

Most of what you cannot do after filing is the flip side of something you must do.

• You cannot stop paying the regular mortgage. Chapter 13 cures arrears only while you maintain the ongoing payments (11 U.S.C. § 1322(b)(5)). Falling behind after filing is treated as a lack of adequate protection, and § 362(d)(1) lets the lender ask the court to lift the automatic stay for cause.
• You cannot wait for the judge before you start paying. Section 1326(a)(1) requires plan payments to begin no later than 30 days after the plan is filed or the order for relief, whichever is earlier — before confirmation.
• If you are paying the filing fee in installments, you cannot pay your lawyer ahead of the court. Rule 1006(b) allows the fee in up to four installments within 120 days. Until it is paid in full, neither you nor the Chapter 13 trustee may make any further payment to an attorney or anyone else providing services in connection with the case.
• You cannot get a discharge without the coursework. Beyond the pre-filing credit counseling briefing, a discharge requires an approved financial management course.

The fee is $338 in Chapter 7 and $313 in Chapter 13. In an analysis of federal court data covering 123,185 Chapter 13 cases closed between fiscal 2010 and fiscal 2016, 38.8 percent of cases filed completed a plan and received a discharge — 24.8 percent among debtors who had not paid the filing fee in full at filing, and 2.3 percent among those who filed without an attorney. Those percentages are of cases filed, not of cases confirmed.

Not privately, the way you would outside a case. The home becomes property of the bankruptcy estate when you file, and under § 362(c)(1) the stay as to that property lasts only while it remains property of the estate. A sale during the case runs through the court by motion. [CONFIRM THE SALE AND REFINANCE PROCEDURE IN YOUR BANKRUPTCY DISTRICT WITH A BANKRUPTCY ATTORNEY]

The deadline that matters more for a Nassau or Suffolk homeowner sits outside the bankruptcy court: the foreclosure auction. Not the judgment, not the referee's deed, not the eviction. Section 1322(c)(1) permits curing a default on a principal residence only "until such residence is sold at a foreclosure sale." The Second Circuit treats delivery of the referee's deed as a ministerial act, and in May 2026 a New York bankruptcy court held that a Chapter 13 petition filed after the auction did nothing to revive the debtor's equity of redemption.

Before the gavel, a sale or a payoff that satisfies the debt ends the foreclosure, because the equitable right of redemption survives until the sale. Even after a Judgment of Foreclosure and Sale, RPAPL 1341 provides that where a defendant pays the principal, interest and the costs and expenses of the sale into court, the court shall stay proceedings on the judgment — but you must both pay in and move to stay the sale, or the right expires.

New borrowing during a Chapter 13 plan is governed by your plan terms and your district's local rules. [SET OUT THE LOCAL RULE AND PLAN PROVISION ON INCURRING NEW DEBT DURING A CHAPTER 13 PLAN — confirm with bankruptcy counsel]

The practical constraint is arithmetic. Thirty thousand dollars of arrears across a 60-month plan is roughly $500 a month, on top of the resumed mortgage payment and the trustee commissions and attorney fees paid through the plan. Any new obligation competes with the payment keeping your house.

On credit reporting, most of what circulates is wrong. The Fair Credit Reporting Act, 15 U.S.C. § 1681c(a)(1), permits reporting a bankruptcy for up to 10 years from the date of the order for relief, and draws no distinction between Chapter 7 and Chapter 13. The familiar seven-year figure is voluntary policy at the three national bureaus, which delete Chapter 13 records seven years from the filing date — bureau practice, not a legal right, and measured from filing rather than discharge. A discharge also does not erase the underlying accounts; delinquent tradelines run their own seven-year clocks from the original delinquency.

Moving is not itself a bankruptcy violation. But in New York, moving out of the home you are trying to keep can cost you three protections that homeowners on Long Island and in Queens and Brooklyn lose without being told.

• The mandatory settlement conference. CPLR 3408 requires a conference in residential foreclosure actions on a home loan where the defendant is a resident of the property. It is the court-supervised venue where modification, short sale and other loss mitigation get negotiated.
• The 90-day pre-foreclosure notice. RPAPL 1304 requires a 90-day notice before suit, and strict compliance is a condition precedent. But § 1304(3) provides that the requirement does not apply where the borrower has ceased to occupy the property as a principal dwelling.
• The homestead exemption. CPLR 5206 exempts real property "owned and occupied as a principal residence" — currently $204,825 in Nassau, Suffolk, Queens, Kings, Bronx, New York, Richmond, Rockland, Westchester and Putnam counties, effective April 1, 2024. It shields value above liens and encumbrances from money judgments, not from a mortgage foreclosure, but it can matter to whether a Chapter 7 trustee sells a home with equity.

If a move is unavoidable, tell your attorney before it happens.

Three limits are worth stating plainly.

• A discharge does not remove the lien. Federal court guidance is explicit that a discharge does not extinguish a lien, and that secured creditors may retain rights to seize the collateral even after discharge. Chapter 7 ends personal liability on the note; the mortgage rides through and the lender can still foreclose.
• Chapter 13 does not lower the mortgage payment. Section 1322(b)(2) bars modifying the rights of a holder of a claim secured only by the debtor's principal residence. The plan cures arrears; the regular payment continues unchanged.
• A second mortgage can be stripped only if it is wholly unsecured. The Second Circuit held in In re Pond that the anti-modification protection applies where the junior lien is at least partially secured after liens with priority over it. If the second is even partly in the money, it stays.

Chapter 7 also offers a short runway: the discharge generally issues 60 to 90 days after the date first set for the meeting of creditors, and the stay ends at that point.

New York is a judicial foreclosure state. A lender cannot sell your home without suing you and obtaining a judgment from the court in the county where the property sits — Nassau, Suffolk, Queens, Brooklyn, the Bronx or Manhattan. Every step is contestable, and none of it carries the restrictions above.

• The RPAPL 1304 and 1303 notices and the CPLR 3012-b certificate of merit are each conditions precedent; defects can require dismissal.
• The court must schedule the CPLR 3408 settlement conference within sixty days after proof of service is filed. Both sides must negotiate in good faith, and per the Department of Financial Services a plaintiff acting in bad faith can face civil penalties of up to $25,000.
• Missing the answer deadline is not automatically the end. CPLR 3408(m) lets a defendant who appears at the settlement conference file an answer within thirty days of that first appearance, with a presumed reasonable excuse and no substantive defenses waived.
• Under 12 C.F.R. § 1024.41(g), a complete loss mitigation application received more than 37 days before a scheduled sale bars the servicer from moving for judgment or an order of sale, or conducting the sale, until it has evaluated you and the appeal window has run.

This office does not file bankruptcy petitions. Where Chapter 13 is genuinely the right tool, speak with a bankruptcy attorney — well before any scheduled auction. What this office does is the other side of the same problem: defending the foreclosure case at every court appearance, and negotiating with the lender for a loan modification, a repayment plan, a lien settlement, or a short sale. Outcomes depend on the lender, the county and the facts of the case.

This page is general information, not legal advice. Consultations are free. Call 516-719-4144 or reach the Jericho office through the contact page.

Can I sell my house after filing bankruptcy?

Not privately, the way you would outside a case. The home becomes property of the bankruptcy estate on filing, and a sale during the case runs through the court by motion. The exact procedure varies by district, so confirm it with a bankruptcy attorney. Separately, a sale or payoff at any point before the New York foreclosure auction ends the foreclosure, because the equitable right of redemption survives until the sale.

Can I get a credit card or a car loan during a Chapter 13 plan?

New borrowing during a plan is controlled by your plan terms and your district's local rules, so ask your bankruptcy attorney before applying. The practical problem is the budget. Arrears spread over a plan can add hundreds of dollars a month on top of the resumed mortgage payment, trustee commissions and attorney fees. Any new obligation competes with the payment keeping your house.

How long does a bankruptcy stay on my credit report?

By law, up to 10 years. The Fair Credit Reporting Act permits reporting a bankruptcy for 10 years from the date of the order for relief, and makes no distinction between Chapter 7 and Chapter 13. The common seven-year figure is voluntary policy at the three national credit bureaus for Chapter 13, measured from the filing date rather than discharge. Delinquent accounts run their own seven-year clocks.

What happens if I miss a mortgage payment during Chapter 13?

It is independently serious. Chapter 13 cures arrears only while you maintain the ongoing payments under Section 1322(b)(5). Falling behind after filing is treated as a lack of adequate protection, and Section 362(d)(1) lets the lender move to lift the automatic stay for cause. Under Section 362(e), the stay ends as to that lender thirty days after the request unless the court, after notice and a hearing, orders it continued.

Does moving out of my house affect my New York foreclosure case?

It can, significantly. CPLR 3408 requires the mandatory settlement conference only where the defendant is a resident of the property. RPAPL 1304's ninety-day notice requirement does not apply where the borrower has ceased to occupy the home as a principal dwelling. And the CPLR 5206 homestead exemption covers property owned and occupied as a principal residence. Tell your attorney before you move, not after.