Although foreclosure rates are no longer at historical peaks as they have
been in recent years, millions of homeowners across the nation still face
the personal and financial challenges of foreclosure proceedings. This
is true in Texas, where foreclosure activity across the state and the
Dallas-Fort Worth area has increased in past two years. That leaves many
homeowners struggling to find relief during tough financial times.
At Allmand Law Firm, PLLC, our Dallas bankruptcy lawyers assist clients
explore all of their available options for debt relief and
foreclosure defense, including bankruptcy. As we mentioned in a previous blog that
bankruptcy myths, misconceptions and inaccurate information can severely compromise individuals
and property owners who want to secure the financial fresh start they
need. That’s why our legal team wanted to put together the following
list of foreclosure myths and why they are simply untrue:
- Filing for bankruptcy stops a foreclosure. While bankruptcy may temporarily delay the foreclosure process – and provide
the necessary time and funds to enact a defense strategy – it is not itself
a strategy for completely stopping it. Other loss mitigation options may
be available if you contact your mortgage servicer in a timely manner,
including loan modifications. Depending on your circumstances, the automatic
stay afforded by bankruptcy may also provide you with the time and funds
to catch up on missed payments, or enact a repayment plan that fits the
mortgage servicer’s needs.
- You’re not responsible for paying the bank’s legal fees. This, unfortunately, is not the case. If you read the fine print of your
mortgage agreement, you will find that you are in fact responsible for
the bank’s legal fees in the event of a foreclosure.
- The bank really wants your home back. Foreclosure can be a time consuming process for banks, and is often used
as a last resort. Most banks will do everything possible to work things
out with a homeowner in order to avoid foreclosure, putting you in position
to stay in your home when possible.
- Your involvement with the property is over once the bank takes it back. If the bank sells your home after foreclosure for less than what you owed
on your mortgage, you will be held responsible for paying the difference,
or “deficiency.” Furthermore, the bank can collect interest
on that amount. A chapter 7 bankruptcy or deed in lieu of foreclosure
may clear you of owing a deficiency, so contact Allmand Law Firm, PLLC
to speak with a bankruptcy attorney to talk about your options.
- Even if I pull together the money to stop a foreclosure, there is no way
to stop it. Most states, including Texas, have laws that require foreclosure proceedings
to be stopped if the homeowner has the money to cover all missed mortgage
payments, late fees, and legal fees owed. The lender or servicer is required
by law to send the borrower a notice of default and intent to accelerate,
which gives the homeowner at least 20 days to cure the default before
notice of sale can be given.
If you are behind on your mortgage payments or are currently facing foreclosure,
you have options. We invite you to contact Allmand Law Firm, PLLC to discuss
your unique case and obtain advice tailored to your situation. When you
choose to work with our firm, we may be able to put a stop to foreclosure
proceedings, protect your credit history, protect you against potential
tax obligations, and more.