Home foreclosure is something we all want to avoid. Your house is more than a structure, it’s your home. It’s where your family gathers. It’s your sanctuary after a long day at work. It’s the place your kids return to after school, or even after they’ve grown up.
Dealing with the possibility of home foreclosure can be devastating. But unfortunately, due to job loss or other unforeseen financial circumstances, you can fall behind in payments and face foreclosure. A foreclosure can happen when your home is taken by your lender and is put up for sale. When you take out a mortgage, your contract has a lien on your property. This means that your lender can take your home if you fail to make payments.
This can take place over several stages. After you have missed at least one payment, you will have a payment default. Your mortgage can go into default if you miss payments for several months. This can trigger the pre-foreclosure stage, which means you’ll be sent a notice of default after 90 days of missed payments. You will typically be given a timeline for when the home will be foreclosed and sold. If you cannot resolve it before the deadline, then your home may be sold at a public auction. If it doesn’t sell there, the bank may take over ownership of your family home. From there, the bank will try to sell it on the real estate market to new owners.
While this process can be scary and stressful, you do have options to try to keep your home and avoid foreclosure.
1. File Chapter 13 Bankruptcy
The typical way to avoid foreclosure on your home is to file for Chapter 13 bankruptcy. Like Chapter 7, when you file Chapter 13 an automatic stay will be put in place. However, because you establish a repayment plan with Chapter 13 bankruptcy, you have more options to keep your house after the proceedings are finalized. You can account for missed payments in your court-approved repayment plan, paying back the missed mortgage arrearages over up to 60 months. In addition to this, you need to make sure you stay current on your regular ongoing mortgage payments throughout the bankruptcy process, your ongoing Home Owner’s Association payments if you have such a payment, and that you make your payment plan payments on time. Missing a payment can result in foreclosure.
2. Modify Your Loan
Another option to stop foreclosure is to request a loan modification from your lender. To do this, you must submit an application to your lender at least 45 days before the scheduled foreclosure. Your lender must approve the application and the new terms of your contract. Some options for modifying your loan can include getting lower interest rates, reducing the principal, switching from adjustable to fixed rates, or extending the terms of your loan.
3. Get Help From Your Bankruptcy Attorney
When facing home foreclosure, it’s important to hire a bankruptcy attorney and work with your lawyer to determine what options are best for your situation. Your attorney can review Chapter 7 and Chapter 13 bankruptcy with you to decide which is best for you. They can also lay out the expectations for you and explain what needs to happen for you to keep your house.
Let Us Help You Avoid Home Foreclosure
If you are facing foreclosure on your home, let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.