If you have fallen behind on your mortgage loan payments and you have a house in foreclosure, a bankruptcy attorney can show you how to exercise your various debt relief remedies and options to immediately stop the foreclosure and protect and keep your home and investment. One such option is to file a bankruptcy and repay your missed mortgage payments through a Chapter 13 repayment plan, so that you will avert the foreclosure and save your home. To determine whether bankruptcy is the best solution for saving your home from foreclosure, you'll want to talk to a bankruptcy lawyer and review your debt relief options.
What to Do When You Have a House In Foreclosure
When you fall behind on your mortgage payments, your mortgage lender cannot just foreclose on your house without notice. Your lender must record a Notice of Default and give you 90 days to bring your loan current and avoid a foreclosure. Once you receive a Notice of Default, it means that your house is in foreclosure. The most important thing you can do if you are facing a foreclosure is immediately seek the assistance of an attorney. Many people put all of their eggs in one basket, and hope to obtain a loan modification that will save their home in foreclosure. But loan modifications are hard to get, and if you don’t get one you may lose your home in a foreclosure.
Notice of Default Cure Period
One of the main protections provided by law to protect you is the Notice of Default cure period. Your mortgage lender cannot just foreclose on your house without notice. Your lender must strictly follow detailed statutory procedures, including the filing of a Notice of Default and then giving you a statutory, 90-day period to bring your loan current and avoid a foreclosure.
Loan Modifications are Very Hard to Get
If you have ever tried to get a loan modification, you will know first-hand that loan modifications are hard to get. A very small percentage of loan modification requests are granted. If you are pursuing a loan modification in hopes that a medication will save your house in foreclosure, you should simultaneously meet with a bankruptcy attorney, so that you have a back up plan to save your home.
Notice of Trustee Sale
After the 90-day Notice of Default period expires, your mortgage lender cannot just run down to the courthouse steps and conduct an auction sale of your home. There is another measure of protection provided in the statutory procedures regulating foreclosure, which requires that your lender file Notice of Sale. The Notice of Sale, once filed, formally sets a date for the foreclosure sale of your home, and gives notice of the foreclosure sale. Usually, the sale date is set for 20-30 days after the day that the Notice of Sale is filed. If you have received a Notice of Sale and you still have not consulted with a lawyer, you need to pick up the phone immediately and call a lawyer now.
Chapter 13 Bankruptcy
The bankruptcy laws provide you with a powerful legal remedy when you have a home in foreclosure. Specifically, by filing a Chapter 13 bankruptcy, you can repay your missed payments over time, or at least until you can come up with the money to bring your loan current and then dismiss your bankruptcy. By repaying your missed payments, you can bring your loan current and therefore avert a foreclosure of your home.
Get Out of Chapter 13 Early
One of the great things about Chapter 13 bankruptcy is that you can either complete your repayment plan and bring your mortgage loan current by repaying all of the missed payments, or if you can get a loan modification or somehow come up with the money required to bring your loan current, you can dismiss the bankruptcy. You can dismiss the case practically as a matter of right at any time you want to dismiss it, provided there are no allegations of fraud or abuse. Once dismissed, you are no longer in bankruptcy and no longer have to make plan payments to the Court. So if you have to file Chapter 13 to save your home in foreclosure, you now know that it doesn't mean that you're stuck in a bankruptcy for the next 5 years. If you are able to bring your loan current, your attorney can end your case by filing a request for voluntary dismissal at any time.