A North Carolina borrower had a bankruptcy dismissed for abuse of process in 2026. When does that dismissal qualify for an exception to the state foreclosure pause during a pending loss mitigation request?
Correct Answer
D) An exception if that happened within the last 12 months
The bar does not apply if the borrower has failed to comply with a Chapter 13 bankruptcy repayment plan or has had any bankruptcy proceedings dismissed for abuse of process within the last 12 months. Other choices: the exception is written in; abuse-of-process dismissals are not limited by chapter; and a mere filing is not enough. Source: 04 NCAC 03M .0703(a)(3)
Why This Is the Correct Answer
The bar does not apply if the borrower has failed to comply with a Chapter 13 bankruptcy repayment plan or has had any bankruptcy proceedings dismissed for abuse of process within the last 12 months. Other choices: the exception is written in; abuse-of-process dismissals are not limited by chapter; and a mere filing is not enough. Source: 04 NCAC 03M .0703(a)(3)
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