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.
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 may own.
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 Ohio, the final foreclosure deadline is the day of the foreclosure sale and the time the sheriff sells the property. In other words, when the gavel falls, its too late.
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. Your regular payment and enough to catch up on your missed payments over the life of the plan, plus other administrative costs, get paid every month.
PAY BACK OVERDUE MORTGAGE PAYMENTS
OVER TIME...IN LOW....EASY...PAYMENTS
What happens to the mortgage payments I am behind on?
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. This is what makes it possible to catch up. You can literally 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? 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.
The Note was your personal promise to pay for the money you borrowed from the mortgage lender. The Mortgage was your agreement to pledge your home or other real property as "collateral" for the loan. By doing so, you gave the mortgage lender a lien on your real property.
"Foreclosure" is the court proceeding (lawsuit) 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?
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 can't or won't pay your mortgage, the mortgage lender starts foreclosure. This is a lawsuit against you.
However, before doing so, you will usually get one or more demands for payment. If you still don't 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.
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 "waive" its rights to proceed with foreclosure.
After the papers are served on you, and assuming you don’t respond, and normally you won’t since you don’t generally have a legal defense, the mortgage company will get a “judgment” against you. This means now you owe the entire amount.
Then, the mortgage company will request an order for sale, to sell the property to get money to pay the amount of the judgment. The sale will be advertised in the paper for 3 weeks prior to the sheriff selling the property to the highest bidder.
The money received from the highest bidder is first applied to pay court costs, then 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?
After the foreclosure sale, in Ohio you have the right to “redeem” the house, by paying all the money due the lender, plus costs. If you don’t, then you need to be out at that time. If you don't vacate within that time, you can then be evicted by the new owner, and 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, which is the normal case, what happens to unpaid part?
Well...that's where the Note comes in. Remember the Note you 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 some cases, the mortgage lender will try to collect upon this Note obligation from you personally.
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" (assuming you own no other real estate and the mortgage lender did not record its judgment against you by filing it with the county) 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.
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 final foreclosure deadline 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 was not final at the time 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 final foreclosure deadline, 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 than having it sold at a foreclosure auction. Filing Chapter 7 can buy you 3 or more months. Filing Chapter 13, especially where you agree to pay "adequate protection" payments to the mortgage lender, can buy you 6 months to a year, depending upon the facts of your situation.
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 could 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 thousand 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 the final foreclosure deadline.
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.