Connecticut Foreclosures and Repeat Bankruptcy Filings: When Bankruptcy Does Not Stop Title from Vesting

April 15, 2026

For lenders pursuing strict foreclosure in Connecticut, a last-minute bankruptcy filing is often viewed as an automatic reset of the process. In many cases, that assumption is correct. However, where a borrower has filed multiple bankruptcy cases within a one-year period, a subsequent filing may not trigger the automatic stay at all. In that circumstance, law days may pass and title may vest despite the filing of the bankruptcy petition.

This distinction is important. In the right circumstances, a lender may duly proceed and obtain title notwithstanding a bankruptcy filing that would otherwise be expected to halt the process.

The Legal Framework

Under federal law, the filing of a bankruptcy petition generally triggers an automatic stay. That protection is limited, however, in cases involving repeat filings. Under 11 U.S.C. § 362(c)(4)(A)(i), if a debtor has had two or more bankruptcy cases pending within the previous year that were dismissed, a subsequent filing does not give rise to an automatic stay.

At the same time, Connecticut law provides that the filing of a bankruptcy petition opens a strict foreclosure judgment and sets aside the law days. Conn. Gen. Stat. § 49-15(b).

This creates a practical issue: If federal law provides that no stay arises, but Connecticut law assumes that a bankruptcy filing affects the foreclosure, what happens to the law days?

The Decision

In Wells Fargo Bank, N.A. v. Fusaro, the Connecticut Superior Court addressed that issue directly. The borrower filed three bankruptcy petitions within a one-year period, with the third filing occurring immediately before the scheduled law day.

The foreclosing plaintiff sought an order confirming that the most recent bankruptcy filing did not operate as a stay and that title vested upon the passing of the law day.

The court granted that relief. Applying 11 U.S.C. § 362(c)(4), the court held that no automatic stay arose from the third filing. And because no stay was in effect, the foreclosure was not interrupted. The law day passed, and title vested in the plaintiff by operation of law.

In reaching that result, the court resolved the apparent tension between federal and state law by focusing on the straightforward issue of whether a stay actually existed. When federal law provides that no stay arises, there is no basis to treat the bankruptcy filing as having disturbed the law days.

What This Means in Practice

This decision makes clear that lenders should not assume that every bankruptcy filing halts a foreclosure proceeding. The operative issue is whether an automatic stay is actually in effect.

Where § 362(c)(4) applies, the filing alone does not prevent the passage of law days. A strict foreclosure proceeds as it would in the absence of any bankruptcy filing. In that setting, the burden shifts to the borrower. If the borrower intends to halt the foreclosure, it must seek and obtain relief from the bankruptcy court. The filing of the petition alone is not enough.

Strategic Considerations for Lenders

From a practical standpoint, the borrower’s recent bankruptcy history becomes critical. Whether a stay exists may depend entirely on how many cases have been filed within the past year and how those cases were resolved. That is not information lenders always focus on at the outset of a default, but in cases involving repeat filings, it can determine whether the foreclosure must stop or whether it may proceed without interruption.

There is also a practical consideration that often arises once law days have passed. Even when a lender concludes that no stay is in effect and proceeds accordingly, it is generally advisable to seek a confirmatory order from the court establishing that title has in fact vested. While not always strictly required, such an order provides clarity in the record and can be important for downstream purposes, including obtaining title insurance and confirming marketable title following the foreclosure.

Final Thought

Serial bankruptcy filings have long been used as a means of delaying foreclosure. This decision confirms that such tactic has limits.

Where the statutory conditions are met, a bankruptcy filing will have no immediate legal effect on a Connecticut strict foreclosure. Law days may pass, and title may vest, notwithstanding the filing.

For lenders, the takeaway is practical. Do not assume the process has stopped. In the right circumstances, it has not.

Takeaways for Lenders

• A bankruptcy filing does not always automatically stop a Connecticut strict foreclosure
• Where 11 U.S.C. § 362(c)(4) applies, no automatic stay arises
• Without a stay, law days may pass and title may vest
• The borrower must take affirmative action in bankruptcy court to impose a stay
• Early analysis of a borrower’s filing history can determine whether the foreclosure proceeds or resets

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Neubert, Pepe & Monteith, P.C. represents banks, lenders, and creditors in commercial litigation, foreclosure, bankruptcy, and debt enforcement matters throughout Connecticut. The firm regularly advises clients on strategies to maximize recovery, enforce judgments, and navigate complex borrower-side tactics, including bankruptcy filings and collateral challenges.

For more information regarding this article or to discuss similar issues, please contact: S. Bruce Fair at bfair@npmlaw.com.

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