How to keep my home and avoid foreclosure

This article is about how you can keep your home and avoid foreclosure. Bankruptcy and non-bankruptcy options are discussed.

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How to keep my home and avoid foreclosure through bankruptcy

How can I save my home and avoid foreclosure through bankruptcy

#How can I save my home and avoid foreclosure through a Chapter 7 bankruptcy

#How can I save my home and avoid foreclosure through a Chapter 13 bankruptcy

Can you stop foreclosure once it starts?

When is it too late to stop foreclosure?

Get a Loan modification in your case

How can I save my home and avoid foreclosure through bankruptcy

One way to save your home and avoid bankruptcy is to file for bankruptcy.

When a bankruptcy law called the automatic stay comes into effect with most bankruptcy filings, most foreclosure processes are stopped. Unlike state court actions such as seeking injunctions against foreclosure, you don’t have to claim the misapplication of mortgage payments, the addition of excessive fees, or some other unlawful behavior by the mortgage company. Foreclosures stop because the automatic stay law requires it.

Your mortgage company may have rejected your requests for loan modifications. Specifically, you may have applied for a mortgage modification asking for your back mortgage payments to be rolled into your balance. And your mortgage company have have rejected your request.  That does not matter.  A successful bankruptcy case stops the foreclosure of your property, even if your mortgage company does not agree.

How can I save my home and avoid foreclosure through a chapter 7 bankruptcy?

 

Chapter 7 will save your home from most pending foreclosures, but it is not a long-term solution. If you are in default, your mortgage company can choose to get the property back instead of accepting payment. In this situation, the mortgage company asks for the Court’s permission to foreclose. The Bankruptcy Court very often grants such requests.

Once the bankruptcy court removes its protection, the mortgage company restarts the foreclosure process. Likewise, the borrower is also free to negotiate a loan modification. Following this path is a risky strategy for the borrower because the lender is not obligated to modify the loan and proceed with the foreclosure process

  • Benefits: Foreclosures are generally stopped. It buys the homeowner time.
  • Disadvantages: It’s not a long-term solution, and the mortgage company can restart the foreclosure process with the Bankruptcy Court’s permission.

 

#How can I save my home and avoid foreclosure through a Chapter 13 bankruptcy

Unlike Chapter 7 Bankruptcy, Chapter 13 is a long-term solution to avoiding foreclosure and saving your home. It re-organizes, cleans up, and restructures debt. In most cases, it protects your property even if the foreclosure process has started. A Chapter 13 plan allows you to bring current missed mortgage payments. At times, it also removes second mortgage liens on your property. These are significant benefits!

Some jurisdictions across the country have instituted loan modification programs that allow for loan modifications to be negotiated and completed while you are in a Chapter 13 bankruptcy. Generally speaking, your chapter 13 attorney will negotiate your loan modification on your behalf. Your mortgage company does not have to grant a loan modification, but if they do, the modification generally gets approved by your bankruptcy judge. Having a loan modification approved by a Federal Judge is a significant benefit!

Very recently, the Federal Jurisdiction in my area of Texas approved a loan modification program for Chapter 13 bankruptcy filers. The law applies to a vast area that includes Austin, San Antonio, Waco, and the surrounding counties. If you live somewhere in this area and face foreclosure and other debt challenges, give us a call for your free initial consultation

In a nutshell

  • Benefits: It’s a more comprehensive solution designed to bring your mortgage payments current. It protects your property so long as you follow the bankruptcy rules. You can also discharge other debts.
  • Disadvantages: It generally takes 3-5 years.

 

Can you stop foreclosure even after it starts?

Yes, but foreclosure must be stopped before the property is sold. I have stopped foreclosures the day before the sale date, but I would not wait that long. Preparing a bankruptcy petition has many requirements, and it’s helpful to have time to do the job correctly.

I understand that in some cases, loan modification negotiations fall through at the last moment, and the borrower has little time before the sale-date. If that’s the case, contact us immediately.

When is it too late to stop foreclosure with bankruptcy?

In a nutshell: Once the property is sold, and the foreclosure process is complete.

Mortgage companies generally start demanding the loan’s entire balance due to alleged default by the borrower. In non-judicial foreclosure states, they continue by publishing a foreclosure notice for a specific time (generally for about four weeks). These notices must follow specific legal disclosure requirements such as giving notice of default, the payoff, location, date, and time of the foreclosure sale. In some states, the foreclosure process runs through the court system. It is similar to a lawsuit where the mortgage company asks the court to allow the foreclosure. Hybrid foreclosure states incorporate features of both types of foreclosure methods.

Regardless of where in the foreclosure process you are, filing for bankruptcy stops it unless foreclosure is completed and the property is sold. In that event, you no longer own the property, and it will be too late to file for bankruptcy to stop foreclosure. There are some exceptions to this rule. At times, the law provides for redemption periods, but generally speaking, once the foreclosure process concludes, bankruptcy will not stop a process that is no longer occurring.

When it's too late to stop foreclosure with bankruptcy?

In a nutshell: Once the property is sold, and the foreclosure process is complete.

States have different foreclosure rules, and you should look into your state’s specific laws. They generally start calling the entire balance of the loan due to alleged violations of the loan agreements by the property owner. They also have to publish a notice of foreclosure for a specific period (generally for about four weeks). These notices have specific legal requirements such as giving notice of default, the amount the borrower must pay to bring the loan current, location, date, and time the foreclosure sale will take place.

In some states, the foreclosure process runs through the court system. An action similar to a lawsuit is filed by the lienholder, asking the court to authorize the borrower’s property’s foreclosure. Other hybrid states have foreclosure systems that incorporate features of both ways of foreclosing. Regardless of where in the foreclosure process you are, filing for bankruptcy stops foreclosure, but once the foreclosure process is completed, you no longer own the property, and it will be too late to file for bankruptcy to stop foreclosure. There are some exceptions to this rule. At times, the law provides for redemption periods, but generally speaking once the foreclosure process completes, bankruptcy will not stop a process that is not occurring anymore.

Get a loan modification to save your home

Our law firm accepts cases from all Texas counties covered by the Southern District of Texas and Western District of Texas Federal Jurisdictions. It is a vast area that covers Houston, San Antonio, Austin, and El Paso. The Western District of Texas Bankruptcy Court adopted a process for creating and finalizing mortgage loan modifications for Chapter 13 filers. The Court has designated a specific communications portal that allows for Chapter 13 bankruptcy attorneys to submit their clients’ loan modification applications and documents directly to the mortgage company. This portal makes communication regarding loan modifications convenient and streamlined.

Once the modification is accepted, your attorney submits the new loan documents to the Court for review. Court approval makes it very difficult for mortgage companies to renege on the terms of the approved loan modification. This process is only available to those who file a Chapter 13 Bankruptcy.

Save your home!

While we help you stop most foreclosures, we also aim at taking financial stress out of your life. We analyze your credit card debt, unpaid bills, medical bills, owed taxes, consequences of unfiled tax returns, your household income, and the property and assets you own. We then present you with options designed to improve your entire financial situation.

Begin with your first initial consultation

  • In-office or virtual appointment
  • Full review of your financial situation
  • We get your credit report
  • We fill out all the forms and paperwork for you
  • We represent you in your case
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