How Can Bankruptcy Stop a Foreclosure?

When you file for Chapter 7 an “automatic stay” goes into effect which halts all collection attempts by creditors. This also includes any foreclosure sale, albeit temporarily. When you file for Chapter 13 before the sale, however, you can usually stop the foreclosure sale, pay any arrearage you owe the mortgage lender through the Chapter 13 plan, and most importantly, keep your home. In the Chapter 13 plan you continue to make timely mortgage payments. As a result, in most cases at the end of your Chapter 13 plan you are fully caught up on the house payments and keep your home.

NRG Energy Subsidiary Files for Bankruptcy

GenOn, a subsidiary of NRG Energy Inc., filed for bankruptcy Wednesday, June 14 after reach-ing an agreement with its bondholders to eliminate $1.75 billion of its debt and restructure itself as a standalone company. A securities filing, made after the company reached a debt structuring agreement in May, re-vealed information regarding GenOn’s bankruptcy filing and current financial state. With many similar wholesale power companies struggling with low electricity prices, bankruptcy filings across the industry are becoming more common. NRG is the largest independent power provider in the United States. In February, it appointed a pair of new directors and agreed to a deal with Elliott Management and Bluescape Energy Part-ners to sell off some assets and cut costs. The two funds now own a 9.4 percent stake in NRG. This bankruptcy filing will transfer ownership of GenOn to the senior noteholders of the compa-ny and away from NRG. GenOn currently operates 32 power plants across eight states, with a total production capacity of about 15,394 megawatts. About two-thirds of this power comes from natural gas sources. Cheap natural gas found in shale fields has brought down the prices of electricity in recent years, which has shrunk margins for wholesale power generation companies that rely on natural gas.