When threatened with foreclosure, people often consider bankruptcy. However, bankruptcy is not the only way to stop foreclosure, and in many cases it is not the best way.
If you want to keep your house in bankruptcy, you may need to sign a reaffirmation agreement. You will be able to keep your house, but your past-due mortgage payments will not be discharged. While discharging other debts may help you get caught up, the fact remains that if you want to keep your home, you will still need to catch up on your payments and remain current, or you will end up in the same situation again.
Before you file bankruptcy, you should consider other foreclosure defense options.
Temporary Restraining Order (TRO)
The first step may be to obtain a temporary restraining order to stop the foreclosure process. While this is only a temporary measure, it will keep you in your home for now and buy time that can be used to explore further foreclosure defense options.
Does The Lender Have The Right To Foreclose?
It is important to examine exactly who is attempting to foreclose on your home. If your mortgage has changed hands, it is possible that the entity that currently holds it may not be in possession of all necessary documentation. Furthermore, there are procedural requirements for foreclosing on a home. These are required by law, and if they are not followed, the foreclosure may be stopped. For example, the foreclosing party must present you with a notice of default before moving forward with a foreclosure.
Was The Mortgage Fair In The First Place?
Reviewing the terms of the mortgage itself is also critical. Were you a victim of predatory or fraudulent lending practices? If the terms of the loan or the way the loan was handled were unfair to the extent of being unconscionable, you may have a defense against foreclosure.
Mortgage holders do not necessarily want to foreclose. Foreclosing on a home puts them in the position where they then have to sell the property, often at a loss. The mortgage company may be willing to make a modification that allows you to stay in your home and continue making payments that make sense based on your income.
Foreclosure Defense And Bankruptcy
In some cases, these foreclosure defense tactics may be an alternative to bankruptcy. In others, they may go hand in hand with bankruptcy. The key is to work with an attorney who understands the options and can guide you down the path that is in your best interest.
It Is Not Too Late
If you have been notified of a pending foreclosure, now is the time to contact a lawyer. Even if the foreclosure sale is imminent, you may still have options. In some occasions, you may even be able to save your home after a sheriff's sale. Attorney Matthew Obermeier offers free consultations about your foreclosure defense options.