STOP FORECLOSURES!
Want to know how bankruptcy can help?
- Filing Bankruptcy Stops Foreclosure.
- Filing Bankruptcy Can Save Your Home
- Filing Bankruptcy Can Allow You To Pay Back Overdue Mortgage Payments Over Time...In low...Easy...Payments.
- What Is Foreclosure?
- Understanding How Foreclosure Works?
- How To Deal With Mortgage Foreclosure Deficiency.
- Don't Wait...Get The Help You Need...NOW.
- Buying More Time In Your Home.
- Buying More Time To Get Your Home Sold Through A Real Estate Broker.
- Getting Rid Of Certain 2nd or 3rd Mortgages.
- What About Refinancing To Avoid Foreclosure?
FILING BANKRUPTCY STOPS FORECLOSURE
We stop foreclosures all the time. Let me repeat that. We stop
foreclosures all the time.
As you know, foreclosure is what mortgage lenders start when you get too
far behind on the mortgage you have on your home or other real property.
SAVE YOUR HOME!
I am behind on my payments. What can filing bankruptcy do for me?
It may be able to save your home. The big question is this: If you were
up-to-date on your mortgage now, could you keep up-to-date? If so,
filing bankruptcy...and specifically filing bankruptcy under Chapter
13....could well save your home or that other piece of real property.
You see.... immediately....when you file a Chapter 13 bankruptcy, your
mortgage lender must stop any pending foreclosure. However...and this is
important... this assumes you file bankruptcy before the final
foreclosure deadline.
What do we mean by final foreclosure deadline?
You don't have forever. You have to file bankruptcy while there is still
a foreclosure to stop. For instance, in Texas, foreclosures occur on the
first Tuesday of each month. In Texas, filing bankruptcy after the
foreclosure date does not stop the foreclosure.
I do not live in Texas? Does that make a difference?
Absolutely. How long you have to file bankruptcy and still stop a
foreclosure proceeding is a matter of State law. That is, it all depends
on the foreclosure laws of your State.
How do I find out for my State?
If your home or real property is in foreclosure...even if there is a
threat of foreclosure...contact an experienced bankruptcy attorney...and
do it now. You have nothing to lose. Most experienced bankruptcy
attorneys offer a free initial consultation. Don't wait. Call and set up
an appointment with a bankruptcy attorney. Whatever you do...don't get
advice from your mortgage lender.
What happens after I file a Chapter 13 bankruptcy?
Assuming the plan is to save your home or other real property, once the
case is filed, you start making your regular mortgage payments
again...as they come due. Sometimes, the future payments are included in
your Chapter 13 plan. Sometimes, you have to make them directly to the
mortgage lender.
PAY BACK OVERDUE MORTGAGE PAYMENTS
OVER TIME...IN LOW....EASY...PAYMENTS
What happens to the mortgage payments I am behind on?
Good question. In Chapter 13, we set up a plan of repayment for you, and
one of the things you have to pay is all the money that you are behind
on with respect to your mortgage. That's the bad news. The good news is
that you are generally given many months to do so. For instance, in
Texas, in most cases, you can spread this payment out over the
entire duration of your Chapter 13 plan, which is anywhere from 36 to 60
months, depending upon your circumstances. Let's say you were $3,000
behind in your mortgage payments before filing bankruptcy under Chapter
13. And...let's say your Chapter 13 plan is set up to run for 48 months.
In most cases, you can pay back the $3,000...without interest or
additional late fees...by paying $62.50 per month ($3,000 / 48 =
$62.50).
WHAT IS FORECLOSURE?
Tell me more about foreclosure. What exactly is foreclosure?
If you will remember, way back when you got your mortgage, you signed 2
documents. You probably signed a lot more than 2 documents, but the 2
documents I am speaking about were the Note and the Mortgage (called a
Deed of Trust in Texas). The Note was your personal promise to
pay for the money you borrowed from the mortgage lender. The Mortgage
was your agreement to serve up your home or other real property as
"collateral" for the loan. By doing so, you allowed the mortgage lender
to put a lien on your real property.
"Foreclosure" is a proceeding which your mortgage lender starts
for the purpose of selling your real property. The mortgage lender then
applies the money from the sale of your property toward payment of your
debt.
UNDERSTANDING HOW FORECLOSURE WORKS?
So, how does foreclosure work?
Foreclosure is handled somewhat differently from State to State, but
using Texas as an example, here is how it works. When you get
far enough behind....usually about 3 months....on your mortgage, to the
point where your mortgage lender has reason to believe that you either
cannot or will not pay your mortgage, the mortgage lender starts
foreclosure.
However, before doing so, you will usually get one or more demands for
payment. If you still do not pay and catch up your mortgage, the mortgage
lender will turn the matter over to an attorney who specializes in
handling foreclosures. That attorney will sometimes write you to give
you one last chance to catch up your mortgage. Then, you will be sent a
letter that tells you that the mortgage lender is exercising its right
to "accelerate" your mortgage, which means it is exercising its right to
declare your entire mortgage due...as opposed to just your delinquent
payments. In Texas, this is a necessary step before the
mortgage lender can start foreclosure. At this point, the mortgage
lender will generally refuse to take any partial payments from you
because the mortgage lender does not want to do anything to accidentally
"waive" its rights to proceed with foreclosure.
After this is done.....in Texas.....the mortgage lender will post and
publish a Notice of Foreclosure Sale or Notice of Substitute Trustee's
Sale and provide you with twenty days notice of the pending foreclosure
sale. This Notice will inform you of the date that the foreclosure
sale will occur. A copy of the Notice of Sale
must be served on you, and...in Texas...this gives you about 20
days advance notice of the sale.
The sale is then conducted in a public place. Anyone interested in
buying your property comes to the sale and bids on your property. This
highest bidder gets your property, pays the bid price and receives from
the foreclosing attorney a deed which conveys to the highest
bidder...title to the property.
The money received from the highest bidder is first applied to pay any
outstanding real property taxes, and then it is applied toward payment
of your debt with the mortgage lender and...if there is enough
money....the costs involved in preserving the property and processing
the foreclosure. In almost 100% of the foreclosure cases, the amount bid
is not enough to pay off all these costs.
After my house is foreclosed, how long is it before I have to move out?
We will use Texas law to answer this question. In Texas....after the foreclosure is complete, someone checks to see if
you are still living in the property. If you are still there (and you
have NOT filed bankruptcy), the buyer of the property files a Forcible
Detainer and Eviction with the Justice of the Peace Court to obtain an
order requiring you to vacate the property within so many days.
If you don't vacate within that time, the Sheriff comes and physically
throws you out, along with your family and all your belongings. You are
literally put out on the street.
DEALING WITH THE MORTGAGE DEFICIENCY
Assuming the foreclosure does not bring in enough money to pay off my
debt with the mortgage lender, what happens to unpaid part?
Well...that's where the Note comes in. Remember the Note your signed at
the closing. That Note....in essence....pledged you as collateral for
the loan. Very simply....you still owe whatever part of the debt is not
paid through the sale of your property. This is generally referred to as
a "mortgage deficiency". In most cases, the mortgage lender will try to
collect upon this Note obligation by suing you personally and taking a
judgment against you.
How much can I expect the unpaid part to be?
Every foreclosure sale is different, but the harsh reality is that a
foreclosure sale almost never brings anywhere near as much money as when
you sell your property through a licensed real estate broker. As a
result....we many times see mortgage "deficiencies" of $20,000 to
$50,000 or more. How much the deficiency is depends on what your real
property was worth, and how much value...if any....there was in your
property above what was owed on your mortgages. For instance, let's say
your house was worth $170,000 in the hands of a real estate broker, but
only sold for $120,000 at a foreclosure auction. And...let's say you had
2 mortgages against it, one for $140,000 (including your past-due
payments and the costs of foreclosure), and a second mortgage for
$30,000. In this example, after foreclosure, you would still owe $20,000
on your first mortgage loan and $30,000 on your second mortgage loan,
for a total of $50,000.
Can filing bankruptcy help me get out from under this mortgage
"deficiency"?
Absolutely. The bad new is that you owe it. The good news is that this
debt is "unsecured" and...most of the time...by filing bankruptcy you
can get rid of most...if not all... of this debt. In our example, that
may mean getting rid of $50,000 in debt...plus all the future interest.
DON'T WAIT...GET THE HELP YOU NEED...NOW
When should I come to see an attorney about filing bankruptcy?
If your house is in foreclosure or about to be....the answer is now,
immediately, today. The sooner the better. The earlier you are in the
process of foreclosure or threatened foreclosure: (1) the more options
you have, (2) the quicker you will find out what your options are, (3)
the less the foreclosure expenses the mortgage lender will have incurred
and...in turn... the less you will have to pay back, (4) the more time
there is to figure out if filing bankruptcy is right for you, and if so,
the more time there will be for getting all the documents properly
prepared to effect your filing.
BUY MORE TIME IN YOUR HOME
I'm still living in my house, but what if I can't afford to keep up
the payments? What can filing bankruptcy do for me?
Sometimes, there just isn't enough income to continue to afford your
home, as for instance where you have lost your job or where you and your
spouse have split up.
In this event, filing bankruptcy before the foreclosure sale
can at least buy you more time in your home. Filing bankruptcy is like
throwing a net over the mortgage lender. You see, when you file
bankruptcy, the Bankruptcy Court immediate issues a court order that
tells all creditors to stop in their tracks until they are given
permission by the court to do otherwise. The net is this Court order,
and what happens is that your mortgage lender has to stop the
foreclosure....until it gets permission from the court to continue. Even
if the mortgage lender responds as fast as possible, as long as the
foreclosure sale did not occur before you filed bankruptcy, filing
bankruptcy will buy you an additional 30 days in your home. In most
cases, it works out to another 2 or 3 months, or more.
BUY MORE TIME TO GET YOUR HOUSE
SOLD THROUGH A REAL ESTATE BROKER
In addition, by filing bankruptcy before the foreclosure sale,
you can stop the foreclosure, and if there is enough value in your house
to justify selling it, you can buy some time to try to get it sold
through a real estate broker. Remember, selling your house through a
real estate broker almost always brings more money that having it sold
at a foreclosure auction. Filing Chapter 7 will buy you 3 or more
months. Filing Chapter 13, can buy you 3 to 6
months, depending upon the facts of your situation and the
State that you live in.
GETTING RID OF CERTAIN 2ND OR 3RD MORTGAGES
How else can filing bankruptcy help me with respect to may house?
Sometimes...we can completely strip off and get rid of a 2nd or 3rd
mortgage. Under the law, if your file bankruptcy under Chapter 13, you
have a right to strip off any mortgage that is completely "unsecured".
For instance, say your house is worth $100,000, but you owe $110,000 on
the first mortgage, and another $30,000 on a second mortgage. By filing
bankruptcy under Chapter 13 (and this assumes you stay in your case to
completion), you could...in this example...strip off the second mortgage
completely. And...let's say your mortgage payments on the second
mortgage are $350 per month. This would save you $350 per month. This
might be the difference between keeping your house and making it, on the
one hand, or not filing and losing everything.
WHAT ABOUT REFINANCING TO AVOID FORECLOSURE?
I am behind in my mortgage payments and the foreclosure has already been
started. Is it too late to hire a mortgage broker to try to refinance my
house?
It probably is too late. First off, in our experience, if your situation
is so far gone that you are already in foreclosure, there is little
likelihood that a mortgage broker can help you, and this assumes that
the mortgage broker isn't just leading you on to make a few bucks at
your expense. The biggest problem is that every day you delay getting in
to see an experience bankruptcy attorney is another day closer to
whatever final foreclosure deadline applies in your State. Don't take a
chance. If you house is already in foreclosure...even if you are working
with a mortgage broker...even if the mortgage broker sounds
promising...make an appointment to go see an experienced bankruptcy
attorney. You have nothing to lose and everything to gain. Give yourself
a backup plan...just in case the refinance does not come through as
hoped.