Did you know there are approximately 1.5 million foreclosures every year in the United States. Most people going through the process feel isolated, alone and hopeless – and desperate to keep their home. Perhaps they’ve lost their job or contracted a serious illness that has prevented them from earning money. Maybe they’ve mismanaged their money. They’ve missed a few mortgage payments and now they’re receiving threatening calls from their lender.
Most lenders do not move quickly with foreclosure proceedings, which are costly for all involved. In fact, many are willing to work with the homeowner to amend the payment plan or restructure the loan, if the lender thinks it will eventually get its money back. Unfortunately, once foreclosure proceedings begin, it’s difficult to stop them and to retain your property.
So, what options are available to those facing foreclosure?
File for Bankruptcy. If a foreclosure sale is imminent, your best option might be to file for bankruptcy. Under bankruptcy law, an “automatic stay” immediately takes effect, preventing the bank from foreclosing or trying to collect its debt. The bank may petition the court to continue with its plan to foreclose, but even if the court agrees with the bank, you’ll have bought yourself a month or two’s time, allowing you to come up with alternative plans to keep your home.
Bankruptcy laws allow you to file under Chapter 7 or Chapter 13 of the federal bankruptcy code. Under Chapter 13, you might be able to keep your home by restructuring your debts. A Chapter 7 filing may delay foreclosure proceedings, but in the end, you may still lose your home.
File a Lawsuit. If your bank isn’t using the courts to foreclose, you might be able to delay or stop proceedings by challenging the foreclosure in court. To win your case, you’d need to prove that the bank did not adhere to state foreclosure laws or regulations. The downside with this approach is that the legal process is costly, and the likelihood of retaining your home remains unlikely.
Apply for a Loan Modification. This document should be filed shortly after you have fallen behind on your payments. You’ll be required to complete a “loss mitigation” application, and if the application is approved, the foreclosure against your home will be permanently stopped, as along as you can stay current with the modified payments.
Are you or someone you know facing foreclosure proceedings? If you have questions about the process and need assistance, you should explore all your options, as an attorney, like a foreclosure lawyer in Hartford, CT, at a firm such as The Law Offices of Ronald I Chorches, can explain.