When facing foreclosure on your home, you may be willing to do just about anything to keep it.
A google search for “foreclosure defense attorney” will yield pages of results of lawyers.
They all promise to give you the best chance of stopping a foreclosure sale on your property.
Why Filing Bankruptcy Is Best To Stop Foreclosure Sales
There are different ways to stop a foreclosure sale, at least temporarily, and these attorneys will accept your money to do any of them.
A few common methods include:
- Loan Modifications
- Analyzing Chain of Title for Defects (proper signatures and assignments, etc.)
- Truth in Lending Act/Reg Z lawsuits
All of the above CAN result in the termination of a foreclosure process, but in most cases they do not.
And it is going to cost you $5,000-$10,000+ to find out.
Many of my bankruptcy clients come to me after spending a bunch of money trying combinations of the above.
Then they discover, the day before the foreclosure sale is to take place, that their strategy did not work.
And mortgage lenders are starting to push back against many of these lawsuits, which in many cases are simply extortion attempts.
This drives up the costs to you and lessens the likelihood of success.
Loan modifications are really the best option, but they take a long time to process, and if you are ultimately denied, you will not have time to do anything else before a sale takes place.
However, filing a Chapter 13 bankruptcy case will stop the foreclosure sale and still allow you to pursue the above remedies should you so desire.
Learn About Bankruptcy Options First
I am going to make a suggestion that may seem outrageous to many:
Before spending thousands of dollars with a “foreclosure defense” attorney or going through a lengthy loan modification process only to be denied the day before a foreclosure sale, first have a free consultation with a bankruptcy attorney and learn about your options.
Immediate Benefits of a Chapter 13 bankruptcy: [pullquote] Learn More About Chapter 13 Bankruptcy[/pullquote]
- Filing bankruptcy immediately stops any foreclosure sale.
- It provides you the ability to catch up on past due payments over up to 60 months and take your loan out of default
- It allows you to eliminate unsecured debts such as credit cards, medical bills, certain taxes and many more, often with the same monthly payment used for your mortgage “catch-up” payments
- It allows you to pursue loan modifications or any litigation you might have against a mortgage lender while keeping the protection of the bankruptcy stay, preventing the lender from foreclosing. Lenders are even more receptive to approving a loan modification while in a Chapter 13 case, when they previously denied it before filing. And the bankruptcy courts in the Central District of California (Counties of Los Angeles, Orange, Ventura, Santa Barbara) have a program that forces lenders to work with you on a loan modification.
- In some cases you can remove liens against your property which are completely “under water” (no equity above them)
- It eliminates uncertainty–meaning as long as you make the required payments, you are guaranteed to bring your loan current and eliminate other debts.
Not everyone is eligible for a Chapter 13 case. For example, you must have less than $1,184,200 in secured debts and less than $394,725 in unsecured debts. But having a consultation with an experienced bankruptcy attorney in your area should be your first step, not the last, when deciding on the best way to tackle foreclosure problems.
Photo Attribution:
Brendel at en.wikipedia.org (Own work) or CC-BY-SA-3.0 , via Wikimedia Commons
