Are you behind on your mortgage payments and cannot catch up? If so, your mortgage company may be preparing a foreclosure complaint right now. Is there a way that you can catch up on your mortgage payments to keep your home? A bankruptcy filing may be the answer to your question.
How Does Foreclosure Work?
When you fail to pay your mortgage payments, your lender can exercise the rights under the mortgage to foreclose your home. In most cases, a lender does not begin a foreclosure proceeding until you are several months behind on your payments. However, by law, the lender has the right to begin the foreclosure process when you are one payment behind on your mortgage payments.
In many cases, a mortgage company calls you when you miss your payment. It sends you multiple letters notifying you that it will begin foreclosure if you do not catch up the payments. After a few months, the company may turn the file over to a foreclosure attorney. The attorney may send you one more letter advising you that it is beginning foreclosure proceedings. After that, you may receive the foreclosure complaint without further notice.
You have a short time to respond to a foreclosure complaint. If you fail to respond, a hearing is scheduled. The judge listens to the attorney for the mortgage company and reviews the documents presented in court. If all documents are in order, the judge grants a default foreclosure judgment and sets a foreclosure sale date.
At the foreclosure sale, your home is auctioned to the highest bidder. If the mortgage company does not receive full payment of the debt, it can request a deficiency judgment for the remaining amount. The lender may then obtain a wage garnishment order allowing it to garnish your wages until the debt is paid. Therefore, you could lose your home and still have to pay the mortgage company more money.
Filing Chapter 13 to Stop Foreclosure
Filing a bankruptcy case stops the foreclosure action. As long as you file your bankruptcy petition before the home is sold, the company cannot take any further action without bankruptcy court approval.
Through a Chapter 13 repayment plan, you pay the past due mortgage payments (mortgage arrearage) a little at a time. You resume making your regular monthly mortgage payments directly to the mortgage lender. As long as you remain in Chapter 13 and keep your mortgage payments current, you can keep your home. At the end of the Chapter 13 case, your mortgage is current. Depending on your financial situation, your mortgage may be the only debt that you owe.
Does Chapter 7 Stop Foreclosure?
Yes, filing Chapter 7 stops a foreclosure auction, but the stay is only temporary. Contact Our Mesa Foreclosure Attorneys for Help Allegiant Law Group wants to help you avoid foreclosure and save your home. Do not wait until you are on the verge of a foreclosure sale to discuss how bankruptcy can help you save your home. It is best to learn about your options as early as possible. Waiting too late could result in the loss of your home.
Allegiant Law Group wants to help you avoid foreclosure and save your home. Do not wait until you are on the verge of a foreclosure sale to discuss how bankruptcy can help you save your home. It is best to learn about your options as early as possible. Waiting too late could result in the loss of your home.