Stop Foreclosure

There are 3 ways to stop the foreclosure

1. Full Payment

If you are able to obtain the full amount of your back mortgage payments, including foreclosure fees and costs, you can stop the foreclosure. Although it seems like best solution, most people lack the money to make full payment. Also you still have to pay other debts, such as vehicles, credit cards, judgments and student loans in addition to the mortgage.

2. Forbearance Agreement

It is possible to stop a foreclosure sale without filing for bankruptcy.  A forbearance agreement allows the Debtor to cure the mortgage arrears by making payments in addition to the regular monthly mortgage payments over a short period of time in an effort to bring the loan current.  In exchange, the mortgage company will postpone the foreclosure sale and allow the Debtor to complete the proposed payment plan.  A forbearance agreement is an excellent resource to be used when the mortgage deficiency is caused by a short-term interruption in income, and the debtor is now making full wages.  If the Debtor is not able to make a full mortgage payment and an additional payment, then a forbearance agreement will not be successful and probably will not get approved by the lender.

3. Bankruptcy

Filing a Chapter 13 with the Court stops the foreclosure immediately.

Filing a Chapter 13 case with the Bankruptcy Court stops the foreclosure and all other creditors immediately. Chapter 13 is a Debt Repayment Program that gives you up to five (5) years to get caught up on back mortgage payments; it also includes a plan to handle any and all other debts by repaying creditors what you can afford. In certain circumstances we may be able to completely dissolve a second or third mortgage and Home Equity Line of Credit. We call this the Ultimate Loan Modification. What can be better than to legally eliminate those kinds of mortgages?

  • Within Chapter 13, the interest rate on back mortgage payments is currently 0%

Sometimes we can completely eliminate unsecured debt, such as credit cards, medical, judgments and any other debt a person has.

  • Interest on credit card debt is usually 0% in Chapter 13
  • No points or loan fees in Chapter 13 as it is a debt repayment program, not a loan

Since it is a repayment plan it is often a good solution for those who want to keep their property and have enough income to afford it.

Filing a Chapter 7 also immediately stops the foreclosure.

Filing a Chapter 7 also immediately stops the foreclosure. Typically you can stay in the property longer as filing a Chapter 7 postpones a foreclosure of your house. It does not save the home unless you can become current with your mortgage very quickly. Usually people eventually lose their home in foreclosure, but Chapter 7 eliminates (discharges) overburdening debt. When the Chapter 7 is over (usually 4 months) your debts are discharged and you get a fresh start. You may be able to keep all or most of the property under Bankruptcy law.

Chapter 7 is typically for those who:

  • Cannot afford the mortgage payments, real estate taxes and have significant other debt
  • Owe more on the mortgage(s) than the original purchase price of the property
  • Have a junior mortgage(s) and the 1st mortgage is foreclosing or has foreclosed.

Chapter 7 legally eliminates almost all debt, including personal liability on second and third mortgage debts and Home Equity Line of Credit. Chapter 7 is appropriate when the homeowner: 1. cannot afford their mortgage payments and has significant additional debt, 2. owes more on the mortgage(s) than the original price or the current fair market value of the home, 3. has a second or third mortgage or Home Equity Line of Credit on the home and the first mortgage is foreclosing or has foreclosed, 4. current income does not exceed the amount allowed under the new bankruptcy laws, 5. has burdensome credit card and medical debt that can’t be repaid, 6. Is suffering harassment by creditors and collectors.

You have the power to stop your foreclosure!

We suggest that you call our office immediately to review your situation and legal options. If you cannot work out a deal with the lender that you can afford, bankruptcy may help! We know the traps, pitfalls and legalities of foreclosure, the procedure with lenders and your rights. We work to stop the foreclosure and get you through the situation.

There can be income tax consequences and personal liability on certain kinds of mortgages if you lsoe your property in a foreclosure sale. Get legal and tax advice at the beginning of the foreclosure process so you know your rights and the consequences of your particular situation.