How Can Bankruptcy Stop Foreclosure Proceedings?
A bankruptcy filing can immediately stop foreclosure in most cases when proceedings have yet to be finalized. Bankruptcy may help homeowners buy more time in determining their next move including whether or not they want to keep their home. This is also a good time for debtors to review with their bankruptcy attorney about their options and their rights regarding redeeming the property (your home).
Some debtors wait until a foreclosure sale is imminent before they consider bankruptcy. In some cases if the sale has occurred the debtor may have the right to redeem the property by making payments overtime that includes current and past due payments. Keep in mind, doing this may not allow the debtor to catch up on payments and they may have to pay the full amount of what the purchaser paid including interest at the foreclosure sale. This can be an option for homeowners if they can afford it.
When bankruptcy is filed the automatic stay goes into effect which is a legal injunction from the court. It stops actions related to foreclosure even if the creditor is unaware the debtor filed. In some cases a foreclosure can be undone by the bankruptcy trustee if fraud was committed on behalf of the creditor. Foreclosure can be a complex situation to deal with the longer a debtor waits until they take action. This is often why homeowners in default or have missed mortgage payments should consider reviewing their situation with an experienced
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Five Ways To Avoid Foreclosure
Homeowners fighting foreclosure often feel overwhelmed by the magnitude of their situation. When trying to save their home, the choices available can often seem confusing or even inaccessible.
Ways that a homeowner can save their home from foreclosure:
- If you’re facing foreclosure and want to remain in your home, you may consider arranging a forbearance with your mortgage lender. This may be particularly helpful if your foreclosure is due to only temporary circumstances and you are sure that your circumstances will change shortly. Forbearance will allow the debtor to forgo mortgage payments for a specified period of time.
- Homeowners facing foreclosure may also want to consider a mortgage modification if their foreclosure is due to inflated mortgage costs. Some lenders may be willing to modify the debtor’s mortgage so that monthly payments are less.
- Homeowners facing foreclosure who also have other debts such as credit cards, may want to consider filing Chapter 13 bankruptcy or Chapter 7 bankruptcy. Bankruptcy will allow the debtor to discharge their unsecured debts while saving their home from foreclosure as a long as they continue to pay their mortgage loan payments.
- If a homeowner facing foreclosure does not want to remain their home but wants to avoid having a foreclosure on their credit record, the debtor may want to sell their home via a “short sale.” Basically a short sale is when a homeowner sells their property for less than what they owe on the mortgage. Currently the government is offering cash incentives for homeowners who use this method. However, mortgage lenders are not “required” to agree to a short sale.
- A homeowner wishing to avoid foreclosure but not keep their home may also want to consider filing bankruptcy and returning the home to the mortgage lender via bankruptcy. If this method is used, the debtor will not owe on the mortgage after their bankruptcy case has been discharged.
When Does Foreclosure Warrant A Bankruptcy Filing?
Many debtors facing foreclosure consider bankruptcy, especially as the foreclosure seems imminent. But when does a foreclosure warrant a bankruptcy filing? First of all let’s talk about how foreclosure works in Texas. In Texas, the bank can choose whether they want to use the judicial foreclosure process or the non-judicial foreclosure process. If they use the judicial foreclosure process, they will need to sue the homeowner to get the right to auction the home off. This usually happens if there is no “power of sale” in the mortgage agreement or deed of trust.
If there is a power of sale, the bank will use what is called a non-judicial foreclosure which will allow the lender to auction the home off without suing the homeowner. In either case if the debtor wants to save their home foreclosure, they will probably need to file bankruptcy to do so, unless they have the cash to catch up on mortgage payments. If the homeowner doesn’t want to keep the home but believes that they may owe money on a second or third mortgage, they may want to file bankruptcy so that they can discharge the unsecured mortgages.
The second and third mortgages and other liens will be classified as unsecured by the bankruptcy court if they exceed the value of the property after the primary mortgage has been paid. It is also important to consider whether you will qualify for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy . For debtors who don’t want to keep their home and only want to discharge junior liens on the property, a Chapter 7 bankruptcy filing would be ideal. In contrast, saving your home from foreclosure may be best done with a Chapter 13 bankruptcy so that you can catch up of on delinquent payments over time.
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Can Bankruptcy Help Prevent Foreclosure on My Home?
When a homeowner fails behind on mortgage payments, the lender may look to begin the legal process of getting the house sold so they can receive payment for the loan against it. Homeowners may qualify for other options such as forbearance, in helping to keep the home and stop foreclosure . If other measures have been exhausted by the homeowner, bankruptcy may be sought.
Bankruptcy has helped many homeowners by delaying the foreclosure process and can even save their home. Filing bankruptcy has been known to delay foreclosure for several months which has given homeowners more time to work on a solution that will allow them to maintain their home. Foreclosure proceedings can be affected by bankruptcy but the outcome may depend on which chapter is filed.
Bankruptcy has the automatic stay that goes into effect when either Chapter 13 or Chapter 7 bankruptcy is filed. The automatic stay helps delay or stall foreclosure from proceeding. If the foreclosure process has started, it may postpone proceedings until the bankruptcy is completed. Chapter 13 bankruptcy allows you to restructure outstanding debt so this may allow you to pay on what is owed on the home. If you have a 2nd or 3rd mortgage, Chapter 13 proceedings may have them listed as an unsecured debt since your first mortgage is secured to the value of the home. Filing Chapter 7 may allow you to save money and have debt cancelled that is secured by your home.
When foreclosure proceedings are halted, you have additional time to work out an agreement with your lender. You also have time to save should you decide to give up your home. Questions and concerns should be reviewed with a legal expert.
Speak to a bankruptcy lawyer today
Foreclosure: Should You File Bankruptcy To Save Your Home?
Can Filing Bankruptcy Prevent Foreclosure?
When your home is at risk for foreclosure, you may feel like the only thing you can do is throw up your hands and let the banks take over the house you raised your family in. But you don’t have to sign over the deed just yet. There are steps you can take when trying to save your home and any one of them could stop the foreclosure proceedings and help get you out of the jam you are in. The first two can be hit or miss and if they fail bankruptcy may be the only option you have left before your house is put on the auction block.
Call Up Your Lender
You may feel like foreclosure is just around the corner, but there still may be time to work with your lender on keeping your home. As soon as you miss a mortgage payment, give your mortgage lender a call to let them know you’re struggling financially. You may be surprised to find that they are willing they will be to work out a new payment plan with you.
Get a Forbearance
When you let your mortgage lender know that you are having financial troubles, they may opt to declare forbearance on your mortgage payments. This means that your lender will put a stop to any and all foreclosure proceedings, as long as the renegotiated terms of the mortgage are met. Forbearance could range from a few months free of mortgage payments, or a smaller monthly payment; however, if you break the contract, the bank will immediately start foreclosure proceedings on your home.
If you have already tried working with your mortgage lender, or you just cannot afford the mortgage payments, it may be time to declare bankruptcy. Even if you are in the midst of foreclosure proceedings, filing for bankruptcy will enact an ” automatic stay “, which means that your debtors must stop all debt collections. If your mortgage lender persists in foreclosing on your home, you are entitled to take legal action against them.
When it comes to protecting your home from foreclosure, do not wait for the last minute to save your house. Filing for bankruptcy can give you the relief you need; additionally, you may have other unsecured debt that can discharged as well.
Don’t let a few missed mortgage payments prevent you from staying in your family home – contact a bankruptcy attorney today.
Another Reason to Consider Bankruptcy to Avoid Foreclosure
Why You Should Consider Bankruptcy to Avoid Foreclosure
Many homeowners are aware that bankruptcy can help you prevent foreclosure thanks to various advertisements that regularly promote this benefit. But, research suggests that in fact bankruptcy may help you avoid foreclosure and even provides evidence that filing is effective in preventing pending sales.
Researchers at the University of North Carolina completed a study that included over 4,000 homeowners who had fixed rate mortgages for 30 years and were more than 90 days late with mortgage payments. Homeowners who
saw foreclosure being imminent sought bankruptcy protection. In this, roughly 70 percent were less likely to have their home be sold through a foreclosure auction.
You can file Chapter 7 bankruptcy or Chapter 13 bankruptcy depending on what you may qualify for, but the study suggested that Chapter 13 filers were more likely by five times to keep their home. So, what is the big deal about bankruptcy when it comes to saving your home?
The automatic stay goes into effect when you file, which is a legal injunction that stops legal actions against you. You gain more time to develop a plan for how to proceed financially, organize debts, or even renegotiate new terms with the mortgage lender. Depending on which chapter you file, you may have other options to consider such as stripping junior mortgages, loan modification, make payment arrangements to pay off arrears or missed payments, or surrender the house and walk away.
Under the automatic stay creditors must follow federal rules giving debtors more control. You can work with your Dallas / Fort Worth bankruptcy attorney to develop the best course of action for your situation. In many cases,
bankruptcy has helped debtors reach an agreement with their lenders when they were unable to reach one on their own.
Use Bankruptcy to Avoid Foreclosure
People that have recently found themselves in a rough spot financially may be feeling overwhelmed and stressed out. At times like this it’s tempting to stick your head in the sand and avoid all of your problems. But facing them head on may be the only solution out of the mess you’re in. If you’ve let your mortgage slip for a few months and are looking at a possible foreclosure and mounting late fees and penalties you may want to consider filing bankruptcy to save your home. It sounds counter intuitive but it’s actually a very good option for people who have fallen into debt with few options left.
Filing bankruptcy to save your home from foreclosure is something that should seriously be considered by people who have had a financial setback, perhaps a job loss or unexpected medical bills , that has allowed your debt to get out of control.
Filing bankruptcy will automatically stop your creditors from chasing you for payments, this includes your mortgage servicer. A Chapter 13 bankruptcy is different than a Chapter 7 in that you don’t have your all your debts discharged outright. In a Chapter 13 the past due mortgage payments and any fees will be put into the repayment plan.
If you are facing foreclosure, and feel like you have ran out of options to save your home, you should speak to a bankruptcy attorney right away. Many firms offer free consultations so there is no out of pocket cost to find out whether bankruptcy is the answer to your problems.
Filing Bankruptcy to Avoid Foreclosure
If you’re facing a foreclosure but want to keep your home you may have heard that bankruptcy is a good way to do just that. Each situation is different, but there are times when a foreclosure can be stopped by a bankruptcy and then there are other situations where a bankruptcy may help your foreclosure situation.
Chapter 7 Bankruptcy and Foreclosure
A Chapter 7 bankruptcy can help save your home from foreclosure if you’re not already in the foreclosure process and if you’re current on your home bills. Basically, a Chapter 7 is good for homeowners who are having a temporary setback or a situational problem (like huge medical bills) that they can’t afford, but with a bit of help they will still be able to pay their mortgage.
As soon as you file for a Chapter 7 bankruptcy the foreclosure process halts until the bankruptcy is finalized, typically it will proceed as scheduled once your bankruptcy is completed, but if you just need a few months to catch up this might do it.
Chapter 13 Bankruptcy and Foreclosure
A Chapter 13 bankruptcy may the better option if you’re looking to protect your home from foreclosure. A Chapter 13 is different than a Chapter 7 where debt is just discharged. In a Chapter 13 your debt is reorganized and prioritized and you are put on a payment plan. If you’re already in the foreclosure process this might be your best option, but if you’re too far in there may be nothing that can be done to save your home.
Speak to a bankruptcy attorney right away as it’s a tricky legal process and there are many legal aspects you’ll have to navigate if you want to save your home from foreclosure by filing bankruptcy.
Can Chapter 7 Bankruptcy Stop a Foreclosure Sale?
Chapter 7 bankruptcy may help stop a foreclosure sale on your home under certain conditions. If possible you may have the option to cure your default by making payments or negotiating with your lender on a solution. While there are other options to consider it is possible the sale may be completed on the home unless you take swift action.
Chapter 7 bankruptcy may help temporarily stop a foreclosure sale. When you file the automatic stay goes into effect. This prevents further collection activity from your lender. This also gives homeowners more time to seek a solution that may help you keep your home. You may choose to cure the default by paying off what is owed or negotiate a deal with your lender. The extra time may even allow you to find a new place to live should you decide to let the house go.
As long as the automatic stay remains in effect the lender can’t move forward with the foreclosure sale. Keep in mind, in some situations a lender may choose to obtain a court order to remove the stay but only under certain circumstances.
Other options to consider in avoiding foreclosure include mortgage modification. Modifying your mortgage loan with your lender may help you obtain a lower monthly payment or extend the amount of time you have to repay the loan. Chapter 13 bankruptcy is another option that helps structure outstanding debt into a repayment plan approved by the court. The plan can last from 3 to 5 years and gives debtors an opportunity to get caught up on mortgage payments. You’ll need to make sure you make payments regularly in Chapter 13 to avoid foreclosure .
Call our bankruptcy lawyer today
If you have any questions or concerns regarding chapter 7 bankruptcy or how to stop a foreclosure sale, don’t hesitate to contact us today for a free consultation.
Can Chapter 7 Bankruptcy Help Me Stop Foreclosure?
Filing Chapter 7 Bankruptcy to Stop Foreclosure
Chapter 7 bankruptcy may not stop the process permanently but it could help you gain more time to develop a solution that will help you keep your home. The filing may give you more time to come up with funds you can use to get your mortgage caught up.
When Chapter 7 bankruptcy is filed the automatic stay goes into effect. The action stops or temporarily prevents collection actions against the debtor by creditors. In this case your lender should cease collection attempts against you when they receive notification of your filing.
In some cases the lender may look to ask the court to remove the stay to proceed with foreclosure . Often, the automatic stay remains in place if the lender doesn’t provide the court with accurate information claiming to be the mortgage holder. Since mortgages are known to be lumped together or sold to other institutions, the creditor pursuing foreclosure may have a challenging time in providing proof to the court.
The stay could give debtors an additional month or two (depending on their situation) when it comes to delaying foreclosure. The additional time may help homeowners save money to put toward defaulted mortgage payments. If the bank doesn’t obtain a buyer for the home, you could still keep your home even if the stay is lifted due to delays that are part of the foreclosure process.
Chapter 7 may help you discharge unsecured debt; meaning you’ll have more money to put toward your mortgage. Questions and concerns should be reviewed with an experienced bankruptcy expert.
How to Stop Foreclosure Right This Second
It’s finally happened. You missed a mortgage payment – and you are dreading the moment when you receive notification about foreclosure proceedings being taken against you. You feel like there’s nothing else you can do to get you out of this sticky trap. Most likely if you are missing mortgage payments your other credit is suffering as well. The stress of not having enough money or credit to pay for all the late fees and penalties may make it seem like there is not a way to avoid a downward spiral into Foreclosure town.
Fortunately, you don’t have to resign yourself to harassing lender phone calls and angry letters about foreclosure. If you want to stay in your home, there are multiple methods you can use to stop foreclosure right this second.
So what are you waiting for? Get ready to fight back against foreclosure !
Use The 90-Day Rule
As soon as you miss a mortgage payment, you have approximately 90 days to make up for the missed mortgage payment before your lender starts foreclosure proceedings against you. During this timeframe, it’s crucial for you to call up your lender to talk to them about your mortgage. Let them know that your mortgage payments have become too much for you, and you’d like a new repayment plan.
Most lenders should try to work with you, as they do not want to go through the foreclosure process either (it takes up valuable time and resources). However, if you encounter a lender who does not want to work with you and you are adamant about keeping your home it may be time to consider other options. If the foreclosure process has already started the best option available may be bankruptcy.
File for Chapter 13 Bankruptcy
As soon as you file for a Chapter 13 bankruptcy , all foreclosure proceedings against you must stop. This is known as an automatic stay, and if any creditors try to collect on debts you owe, you can sue them for damages (asking your lenders for money – now that is a change!).
A Chapter 13 bankruptcy not only stops foreclosure, but it can allow you to keep your home. This is because the bankruptcy courts will re-arrange all of your debts into a new and more manageable repayment plan. This includes your mortgage and any foreclosure proceedings against you, which ensures that you and your family will remain in your home for the foreseeable future.
Avoiding Foreclosure Through Chapter 13 Bankruptcy
Keeping Your Home Through a Chapter 13 Bankruptcy
As the number of homes facing foreclosure continues to remain unacceptably high, many homeowners who are struggling to pay their mortgages seriously consider filing bankruptcy. But how can Chapter 13 bankruptcy help you keep your home?
Let’s take a look at a few facts:
- If you are earning an income, and you don’t qualify for Chapter 7 bankruptcy , you can file Chapter 13 bankruptcy, or what’s called a wage earners plan. Under Chapter 13 bankruptcy, a debtor has several flexible options to stop foreclosure .
- If a debtor is delinquent on their mortgage payments, they can use Chapter 13 bankruptcy to repay their past mortgage payments over the course of their plan which will last 3 to 5 years. For example, if they are in a three year Chapter 13 bankruptcy plan, they can make monthly payments to the mortgage company to catch up on late payments, in addition to making regular mortgage payments every month.
- If a debtor cannot afford to make payments on their mortgage, they may be able to negotiate a mortgage modification with their lender or if they have a second mortgage, such as a home equity loan, which is partially or wholly unsecured, they may be able to cram down the unsecured portion to lower their mortgage payment. The possibility of a cram down should be discussed with a bankruptcy attorney.
Whatever choice the debtor makes, they must keep to the bankruptcy repayment plan or their mortgage lender will be allowed to foreclose on the property. If you enter into a Chapter 13 bankruptcy repayment plan are unable to continue making payments contact your bankruptcy attorney immediately.
Should You File Bankruptcy Or Accept Foreclosure?
Filing Bankruptcy Or Accept Foreclosure
Homeowners facing foreclosure often consider bankruptcy, but is bankruptcy a better option than foreclosure?
Let’s take a look at a few of the factors debtors should consider:
Desire And Ability To Keep Home
The first question a debtor should ask before filing bankruptcy to avoid foreclosure, is if they want to keep their home. If so, does the debtor have the cash and/or income to keep the home in bankruptcy? Whether they file Chapter 7 bankruptcy or Chapter 13 bankruptcy , the debtor is required to make monthly mortgage payments if they are to have any chance of saving their home. The ability to do this depends solely on the debtor’s financial means.
Value Of The Home
While some bankruptcy debtors may want to keep their home and avoid foreclosure, doing so may not be in their best interests. If the home has very little value, the mortgage is upside down or the home is in disrepair, saving it in bankruptcy may not be worth the trouble.
If a debtor has other, non-mortgage related debts, they may want to file bankruptcy regardless of their desire to keep their home. Other debts should be considered for another reason, if the debtor wants to keep another asset such as a car and that car has a loan attached to it, those monthly payments may make it more difficult to pay the mortgage. In the end, the debtor may need to choose which asset is more important to them. There is no standard answer to that question. A car could be just as important as a home if you live 40 miles from work and have no other means of transportation.
How Bankruptcy Can Help Reduce Foreclosure Rate
About one in every 10 Texas homeowners are delinquent on their mortgage and facing a possible foreclosure. Currently, the percentage of Texas homeowners who are delinquent and facing a possible future foreclosure is 10.3 percent, only slightly less than the national average of 10.44 percent. Last year, a record 61,000 homeowners in Texas lost their home to foreclosure and that number is feared to increase this year. Many analysts and “experts” lament the current foreclosure crisis; but fail to recognize the power of bankruptcy in reducing the foreclosure rate in Texas and nationwide.
All of our non-bankruptcy efforts to stop foreclosure have failed abysmally. HAMP, state programs, begging and pleading with uncooperatively and shamelessly greedy mortgage servicers have all had little positive impact on the foreclosure rate. Many homeowners facing foreclosure who have tried all other means without success have turned to bankruptcy for the relief they need. If it wasn’t for bankruptcy, we would probably have a foreclosure crisis more on the level of the Great Depression or worse. Our legislators need to look at the power of bankruptcy and how it can help stop foreclosures if we truly want to abate this crisis.
How can bankruptcy reduce the foreclosure rate?
- Bankruptcy forces mortgage servicers to the negotiating table. Without bankruptcy, homeowners have very little leverage and find themselves waiting on mortgage servicers to get back to them. But with bankruptcy, mortgage servicers are forced to at least consider ways to avoid foreclosure.
- Bankruptcy gives the homeowner time to catch their breath and see things clearly. Because of the automatic stay, the debtor in foreclosure doesn’t need to worry about their home being snatched out from under them while negotiating with the mortgage servicer. This fact alone can give them the peace of mind needed to think through their situation clearly.
- Bankruptcy gives the homeowner a chance to catch up on payments and bring their mortgage current. Outside of bankruptcy it can be very difficult for a debtor to win reasonable repayment terms for their delinquent payments. But in Chapter 13 bankruptcy, a homeowner can repay delinquent payments over the course of 3 to 5 years.
Strategies to Stop Foreclosure
Trying to Stop Foreclosure?
If you’re facing a foreclosure you have to really look at your situation and decide whether you are okay with the foreclosure going through or if you want to avoid it. Then if you decide you don’t want to face a foreclosure you need to determine if you want to keep the house or not.
If you want to keep your home and avoid foreclosure there aren’t many options available but a loan modification may enable you to do both of those things. There are loan modifications you can get with your mortgage servicer or you can get them through the government. The loan modifications offered through the federal government tend to be very good and can make your home much more affordable, even knocking off a large chunk of the principle. But federal loan modifications are notoriously slow and filled with paperwork and deadlines.
For people who decide they don’t want a foreclosure on their credit history but really don’t care if they want to keep the home or not a short sale or a deed in lieu of foreclosure may be a way out. A short sale is an agreement between you and your mortgage lender that says they agree to accept the home, for whatever it sells for, to cover the balance you owe on the mortgage. This can be a great deal, but your lender may not agree to write off any remaining balance.
A deed in lieu of foreclosure means that instead of continuing with a foreclosure your lender agrees to take the deed to your home.
If you are not sure what option is best for you it is advised that you contact a loan modification lawyer or bankruptcy attorney to review your financial situation.
Can I Avoid Foreclosure Without Filing Bankruptcy?
Trying to Stop Foreclosure Without Filing Bankruptcy?
While some homeowners understand that bankruptcy is the best option to avoid foreclosure and discharge other debts, other homeowners are not sure if it’s their best option. While there are some ways that a homeowner can avoid foreclosure without filing bankruptcy, they should carefully consider their whole financial situation before forgoing bankruptcy protection.
Below are a few ways that some homeowners avoid foreclosure outside of bankruptcy:
If a homeowner has a temporary setback such as short-term unemployment or reduction income, they may be able to convince the lender to suspend mortgage payments. However, if the homeowner’s financial situation is more long-term such as ongoing unemployment or a permanent medical disability, avoiding foreclosure with forbearance may not be possible. A matter of fact, some lenders may refuse to give forbearance if they suspect a financial issue isn’t temporary. In those situations, it may be more beneficial for the homeowner to file bankruptcy and use the automatic stay to stop any foreclosure that’s pending.
Sometimes a debtor facing financial difficulty may apply for an interest-free HUD loan and avoid foreclosure outside of bankruptcy. To qualify for an interest-free loan from HUD, the homeowner must be at least four months but not more than 12 months delinquent on mortgage payments and the home MUST NOT be in foreclosure. A homeowner must also have the financial ability to resume regular payments on their mortgage after receiving the loan. For those homeowners facing unemployment and/or other large debts, resuming regular payments on their mortgage may be impossible. For those debtors, filing bankruptcy offers a better solution because it allows them a chance to catch up on payments while stopping the foreclosure process in the meantime.
While mortgage lenders must now stop the foreclosure process while a homeowner applies for a mortgage modification, the entire mortgage modification program is rife with bugs. Homeowners hoping to save their home outside of bankruptcy may find that even if they win a mortgage modification, there isn’t much in terms of monthly savings. Some homeowners who have insisted on forgoing bankruptcy have reported that their mortgage modification made their monthly mortgage more expensive.
Homeowners hoping to use any of the alternative forms of fighting foreclosure must make sure that the process will really work for them. They must also consider their other debts and how they will be impacted. If a homeowner is saddled with credit card debts and medical bills in addition to their delinquent mortgage, they may want to consider bankruptcy. Even in bankruptcy a debtor can pursue alternatives such as mortgage modification while simultaneously receiving the benefits of the bankruptcy automatic stay.
How to Prevent Foreclosure Through Forbearance, Loan Modification or Bankruptcy
Preventing Foreclosure Through Forbearance, Loan Modification or Bankruptcy
It’s a story that’s all too familiar in today’s economic climate: you, or someone you know, have fallen behind on your mortgage payments. Whether you missed your mortgage payments due to a job loss or a skyrocketing adjustable mortgage rate, there’s no denying that missing out on these payments has put you on the fast-track to foreclosure. And you’re desperate to prevent foreclosure at all costs.
Ways You Can Prevent Foreclosure
There are ways you can prevent foreclosure right at this very second.
Don’t let another moment go by – use these tips to prevent foreclosure and protect your home from the auction block:
- As soon as you’ve missed a mortgage payment, be sure to get in touch with your lender immediately. Many individuals resist contacting their lenders, as they’re afraid that they’ll get in trouble for missing their payments. However, your lenders are human too (despite any evidence to the contrary), and they’ll be likely to work out a new repayment plan with you if you request help. Be sure to let them know your current financial situation: there are options available such as forbearance; if your financial situation calls for it mortgage payments can be temporarily deferred for up to twelve months.
- If you’ve already missed a few payments, it’s likely that you’re already in the midst of foreclosure proceedings. Another option to prevent losing your home is to seek a loan modification, which is a reworking of the loan to get mortgage payments lowered. Loan modifications can be obtained through private lenders or the federal government.
- If you do not qualify for the above solutions or your lenders won’t work with you, then it’s time to take drastic measures against foreclosure proceedings: declare bankruptcy. Under bankruptcy laws your lender is sent an automatic stay, which means that all foreclosure proceedings must immediately stop as soon as you file for bankruptcy – and if your lender still tries to collect on your debt, you can take legal action against them. Better still, your home will be federally exempt from any debt restructuring, so lenders can’t force you to sell it in an effort to collect on their debts. In other words, declaring bankruptcy can give you the last-minute save you need to prevent foreclosure proceedings on your home.
Stop Foreclosure Today!
Don’t let foreclosure proceedings take away your home – contact your lender, a loan modification lawyer or a Dallas bankruptcy attorney to see what your options are.
Halt Foreclosure with a Short Sale
People that are looking for a foreclosure alternative may want to try a short sale instead. While a short sale does not help you keep your home, it does help you avoid an actual foreclosure. You first must analyze your motivation before you pursue a short sale, if you want to save your home this is not the vehicle to do so.
In a short sale situation the homeowner is typically underwater on their loan, this means that you owe more on the loan than the home is worth. To proceed with a short sale your mortgage lender has to agree to selling the home for less than the balance remaining on the mortgage. In the ideal short sale situation the mortgage servicer will write off any balance remaining but this isn’t always the case. In some situations you’re still required to pay back any amount of the mortgage that is not covered by the short sale. This may not seem like the best situation, but if you’re having a hard time paying your mortgage and want to protect your credit rating, this smaller loan with smaller payments should be more manageable.
If you aren’t worried about your credit rating and don’t really care if you go through a foreclosure then a short sale is probably not the best option for you. You do end up losing the home and could possibly end up still owing some on the property. But if you’re looking to get out from under the mortgage with as little damage to your credit as possible, a short sale is a good idea.
Contact our bankruptcy attorney today
Learn About a Deed in Lieu of Foreclosure
Deed in Lieu of Foreclosure
If you’re concerned about losing your home to foreclosure you may be looking at alternatives to a foreclosure. A deed in lieu of foreclosure is one option you may want to consider.
First, it’s important to understand that a deed in lieu of foreclosure will not help you keep your home. If you want to avoid foreclosure and keep your house you’re going to have to look into another option. What a deed in lieu of foreclosure does is it prevents you from having a foreclosure on your credit record and going through the foreclosure process.
When you seek a deed in lieu of foreclosure you need your mortgage lender to agree to a transfer of the deed to the property from your name to theirs. In this situation the home is used to satisfy whatever is left on the mortgage and any default charges.
If you are in a situation where your home is creating a great financial instability in your life then you may want to alleviate yourself of the burden by taking the loan out of the equation. If you can get your lender to accept a deed in lieu of foreclosure then you walk away without a home but you also walk away from your home debt scot free without any further mortgage obligations and without owing those late fees you accumulated. On top of this, a deed in lieu of foreclosure prevents the foreclosure process from proceeding which may be beneficial to you for personal, professional and credit reasons.
Job Losses Don’t Need to Equal Foreclosure
When a homeowner suffers a job loss, the most immediate fear is foreclosure. It’s natural to believe that foreclosure is imminent after a job loss; but a job loss doesn’t need to equal foreclosure.
Few things a homeowner can do to avoid foreclosure:
#1 – Contact you lender immediately after a job loss. Be honest with them and explain the situation to them and make it clear that you want to avoid foreclosure.
#2 – Discuss all of your options with the mortgage lender. Usually, a lender will offer a homeowner facing foreclosure three options. a) reduced mortgage payments for a few months until you find another job, b) forbearance, which basically means that you will make no payments for a specific period of time or c) a mortgage modification that will change the terms of your home loan so that your monthly mortgage payments are more affordable.
#3 – Speak with a bankruptcy attorney about your bankruptcy options. Speaking with a bankruptcy attorney as soon as possible when faced with foreclosure is a wise decision while you are working out an agreement with a mortgage lender. Because most unemployed debtors are struggling with other debts as well as fighting to avoid foreclosure, working with a bankruptcy attorney to examine your entire financial situation may be a wise decision.
Maintaining Your Foreclosure Home
For a homeowner who is facing a foreclosure , it should come as no surprise that they may end up residing in their home for months or even years before ever even receiving their first eviction notice. Although they may know that it is coming, in the meantime their home will still need to be maintained. Whether or not the homeowner plans to use that time to save themselves from losing their home or they have run out of options and the bank will be taking the home back, a homeowner still needs to remain responsible for the property. While we hear stories of angered home owners who damage their home, this is not acceptable. Instead, consider these few points in caring for your home up until the point in which it is time to move out.
Keeping your home maintained will prevent the home from losing value. Things such as roof leaks and leaking pipes should be resolved. Although you may not want to pay to fix these types of things, if damage is done the bank may go after you for those costs.
Another reason why you should consider keeping your home maintained is because visitors may come to your home and can get hurt on your property if you are not caring for your home. The last thing you want is a lawsuit in your hands. Also consider that even though you still may lose your property that you should always keep up with your homeowner’s insurance. This covers your possessions and provides coverage for liability.
The last thing you want is even further debt on top of having to deal with your foreclosure. Remember to keep your home in the best shape possible. After all, you never know when or if you are even going to lose your home. Part of being a homeowner is being responsible which is why maintaining the home is very important.
Speak to a bankruptcy attorney today
Homeowners Facing Foreclosure Need Comprehensive Debt Relief
If you thought mortgage lenders would humbly admit that they failed in their efforts to prevent foreclosure , you probably gave them too much credit. Mortgage companies Wells Fargo, JPMorgan and others have balked at the assertion that they have failed in their foreclosure prevention efforts insisting that sending out thousands of letters inviting homeowners to foreclosure counseling is the same as actually providing them the debt relief they need.
While big banks and legislators often scratch their heads at the fact that many homeowners facing foreclosure don’t go in for counseling, bankruptcy professionals already have it figured out. Most debtors facing foreclosure are also facing a litany of other financial and credit problems which a mediocre (at best) foreclosure prevention program does not address.
What good is it to attend a foreclosure counseling session if you have no job, owe tens of thousands of dollars in credit card debt and have the IRS breathing down your neck? Not much good when it doesn’t address all of those financial issues. That’s why many homeowners facing foreclosure simply abandon their homes and/or file bankruptcy so they can discharge most or even all of their debts.
A bankruptcy filing, especially for homeowners who are unemployed and have been without a job for an extended period of time, is often the most practical solution to their financial problems. But the reality is that even if a homeowner really needs to consider filing bankruptcy, the foreclosure counselors are not empowered to give that suggestion to the debtor.
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A judicial foreclosure is a little different from a non-judicial foreclosure and its one you’re less likely to run across. A judicial foreclosure is not used very frequently but there are situations where a court has to step in and the foreclosure has to be processed under their guidance. A non- judicial foreclosure is done without a state court’s intervention.
One time when judicial foreclosures occur is when the homeowner owes the government taxes on the property. In these situations the government can file a lawsuit that requests that the property be sold and the proceeds will go toward those past due taxes While this does require the intervention of a court it doesn’t really have the air of a trial, the government simply has to prove the taxes are owed and the home will go into foreclosure.
Your mortgage servicer can also request a judicial foreclosure but they can proceed along the traditional route of a non-judicial foreclosure just as easily. Most mortgage lenders will decide to forego the judicial foreclosure because it simply takes too long and the extra burden of having a judge involved is an unnecessary added step.
If you do find yourself tied up in a judicial foreclosure it’s often a good idea to have an attorney at your side to represent you in court. While you may not have much of a defense or argument against the foreclosure it’s still a good idea to have your own legal representation.