Foreclosure is a serious matter. If you’re like most people, your home is your biggest investment. So when you are facing a foreclosure and the prospect of losing your home, you risk losing your biggest investment. Don’t wait until the day before the foreclosure sale to do something. If you have questions about foreclosure or bankruptcy get legal help so you know your options available to stop foreclosure as soon as possible.
If you’ve lost your employment, recently gone through a divorce, encountered a medical illness or other setback it’s not unheard of to fall behind on your bills. But when you fall behind on your mortgage payments, property taxes, or homeowner’s association dues, then the mortgage company, taxing authority, or homeowner’s association can take aggressive steps to collect the debt. The most powerful tool to collect such debts is a foreclosure proceeding.
A foreclosure proceeding is a legal process by which a secured lender, be it a bank, financial institution, mortgage company, secured lender , taxing authority, or homeowner’s association can terminate your legal rights or other interest in your home or other real property. The secured party then sells the property at a public auction and the proceeds go toward the debt. Depending on what state you live in a foreclosure sale usually takes place at the same time or date every month.
In a foreclosure proceeding, the homeowner has no control over the auction or sale proceeding. More often than not, the homeowner stands to loose their equity and more if the property goes to foreclosure and sells at the auction. Even when there is no equity in the property, a foreclosure sale is rarely in the best interests of the homeowner because if the property sells for less than what you owe (and it usually does), then there is a mortgage deficit which you will still be on the hook for.
If you don’t have the money to bring the loan current but you want to keep the property, you may still have options. The first option should be to contact the mortgage company to explore any programs they might be offering, such as a workout or forbearance agreement. Assuming you have already missed several mortgage payments (which is why you are in foreclosure) and you can’t afford any of the options the mortgage company is offering, if any, then filing for bankruptcy may be the best option to stop the foreclosure.
Every month, tens of thousands, stop the foreclosure sale and save their homes by filing bankruptcy. Filing a Chapter 13 Bankruptcy allows a homeowner to catch up their missed mortgage payments over 3 to 5 years depending on their situation. If you file for Chapter 13 Bankruptcy to stop foreclosure, your property doesn’t necessarily need to have any equity in it. However if it does have equity, you won’t loose it.
Many people are reluctant to file a bankruptcy because of the stigma that the media and culture have associated with it. Filing for Bankruptcy is not a criminal act and should be considered a business decision and not a moral or fashionable one. Many famous people have filed bankruptcy to save their property, reorganize and get a fresh financial start. So if you are facing foreclosure and the prospect of loosing your home, you can stop the foreclosure by filing for bankruptcy. Chapter 13 Bankruptcy was designed to help people facing loss or property and may be an option for you if you are in foreclosure.
Bankruptcy Eligibility to Stop Foreclosure
If you have disposable income and the bankruptcy means test determines you are eligible to file, and, you haven’t recently filed a previous case, Chapter 13 Bankruptcy will definitely stop the foreclosure, allowing you to take 3 to 5 years to repay your past due payments. That being said, Chapter 13 Bankruptcy isn’t the only way to deal with foreclosure, but it is certainly an option that is based on your disposable income, and not what the lender or party foreclosing demands you to afford.
When your home is up for foreclosure, you probably want to know your legal options on how to stop foreclosure and keep your home. A Bankruptcy lawyer can help you to determine if Chapter 13 bankruptcy is an option for you to stop the foreclosure. If Chapter 13 Bankruptcy is not for you, they may be able to provide assistance in negotiating with your mortgage company, taxing authority, or homeowner’s association so that you can save your home. They may also be able to assist if your home is being wrongfully foreclosed. If the mortgage company didn’t follow the foreclosure process correctly, you may be able to file a wrongful foreclosure action or temporary restraining order. Once a foreclosure proceeding begins, the mortgage company is required to provide you proper notice of the sale as well as give you an opportunity to dispute the debt. In some cases the procedures for foreclosure are not followed correctly and can provide a basis for stopping the foreclosure sale.
If choose to allow your home to sell at the foreclosure sale, and the foreclosure sale brings more for your home than the mortgage balance, taxes, liens, and any other foreclosure costs (which almost never happens), you will be entitled to those proceeds. More often than not, the property sells for much less at the foreclosure sale and the sale doesn’t bring enough to pay any outstanding mortgage balance, taxes, costs, and liens that may be on the property. If that happens, there will be a mortgage deficiency, and you will be responsible for paying that deficiency, even though you won’t own the house anymore. You may be able to file for Chapter 7 Bankruptcy to eliminate the mortgage deficiency.
Many people facing foreclosure wait until the last minute to get help. Like most things in life that go until the last minute you eliminate some of the options you could have taken. In other words, the sooner you get help with your foreclosure, the more options you will have. Contact an attorney in your state that regularly handles foreclosure and bankruptcy to determine all the options to save your home. While there are a lot of great self help books and free information available online, nothing really compares to a live person with years of experience. Most bankruptcy lawyers offer a free initial consultation so it only makes sense to get informed by a professional. Don’t let your home be sold.