A foreclosure sale results in the loss of your home. If you are behind on your mortgage payments, our Chandler foreclosure attorneys may be able to help. If there is a valid defense to the foreclosure complaint, we will tell you. However, if you owe the money and need time to catch up on the payments, a bankruptcy case might be the best way to save your home from foreclosure.
How Does a Mortgage Company Sell My Home in Arizona?
The foreclosure process in Arizona begins with the filing of a complaint with the court. However, most mortgage lenders do not pursue foreclosure right away, even though they could begin foreclosure proceedings after the first late payment.
Instead, the mortgage company attempts to collect the past due mortgage payments for several months before turning the account over to a foreclosure lawyer. The company is more interested in receiving your payment than owning your home. Eventually, if you do not catch up on your mortgage payments, the lender proceeds with the foreclosure action.
When you receive the foreclosure complaint, you have a very short deadline to answer the complaint. If you fail to file a response to the complaint before the deadline, you are in default. The attorney for the lender requests a court hearing. You can appear at the hearing, but the judge may not allow you to testify because you are in default.
At the default hearing, the attorney for the lender presents evidence of the mortgage loan and your delinquency (failure to pay the required payments). If all documentation is in order, the judge grants a default judgment of foreclosure. The judge schedules your home to be sold at the next foreclosure auction.
However, that might not be the end of the matter. If the lender requested a deficiency judgment, you could still owe the company money after your home is sold. If the mortgage company does not receive enough from the sale of the home to pay the loan in full, the court enters a deficiency judgment.
The company may then obtain a wage garnishment order to have your wages garnished for the debt. In other words, you could lose your home and still owe the bank money.
Filing Chapter 13 Stops Foreclosure
Filing a Chapter 13 bankruptcy case could save your home from foreclosure. You must file the bankruptcy petition before the home is sold at a foreclosure auction to stop the foreclosure.
Through a Chapter 13 bankruptcy plan, you catch up on your mortgage payments over time instead of paying the entire past due balance at once. Because you can catch up on the payments over time, you may be able to keep your home. However, you must resume making regular mortgage payments directly to the lender outside of your bankruptcy case. If you fall behind again, you could lose the home.
Does Chapter 7 Save My Home From Foreclosure?
Filing a Chapter 7 bankruptcy case stops the foreclosure process. However, you must be prepared to catch up on the past due mortgage payments in full, refinance the mortgage, or modify the mortgage to keep your home. Chapter 7 is not a repayment plan. The mortgage company can resume the foreclosure when the case is closed or by filing a motion with the bankruptcy court.
If you owe more on your home than it is worth, a Chapter 7 case may be the best way for you to get out of debt. When you surrender your home through Chapter 7, the mortgage company cannot request a deficiency judgment, no matter how much money you owe after the foreclosure sale is complete. Your Chapter 7 case discharges the debt so that you do not need to worry about personal judgments or wage garnishments.
Contact Our Chandler Foreclosure Attorneys for More Information
The legal team of Allegiant Law Group is here to help. Call 602-562-1000 now to schedule your free consultation with a Chandler foreclosure lawyer.