Many people struggle financially sometimes, affecting several facets of their lives. When this happens, they may fall behind on payments for their property. This may cause them to face the possibility of foreclosure. Foreclosure can be a very frightening reality for some people. In the event that individuals face this harsh reality, it is important to know ways that you can potentially stop it from happening. Two ways an individual may be able to save their home from foreclosure is through a loan modification or by filing for bankruptcy. It is crucial to have legal counsel in a time like this to guide you through the process.
When an individual faces the possibility of losing their home, it is important to take the proper precautions that may help them in the long run. If a mortgage lender sues an individual while facing a foreclosure, there are certain steps that can be taken to prevent it. When this happens, an attorney can assert a line of defense and counterclaims to prevent foreclosure. With all information and documents regarding the individual’s mortgage, an attorney may also be able to serve a motion to dismiss the action of foreclosure against them.
When this is done, the individual can work towards receiving a loan modification through entering a Foreclosure Settlement Conference. When this happens, the bank will review the individual’s finances to determine if they are eligible for a modification and which program they are eligible for. This can modify an existing mortgage payment, lower an interest rate, extend the loan term, or lower monthly payments.
Filing for Bankruptcy
The possibility of foreclosure may require an individual to file for bankruptcy. In the event of this, Chapter 13 bankruptcy might be able to stop a foreclosure on a home. Chapter 13 bankruptcy allows individuals to maintain their assets and value to their home. During this process, the individual submits a plan to pay their debts over the course of 3-5 years. This allows them to catch up on certain payments, including a mortgage.
In order to qualify for Chapter 13 bankruptcy, some requirements must be met. The individual needs to receive credit counseling within 180 days before filing. If a petition was dismissed within this time, the individual cannot file again. Once an individual files for Chapter 13, there are also other documents that should be filed. This may include but is not limited to:
- A list of liabilities
- Assets and properties
- A statement of financial affairs
- A list of executory contracts
- A list of unexpired leases
- Proof of credit counseling
- Income payments within 60 days prior to filing
- Monthly net income
- Any indication of a rise in income or expenditures
Once bankruptcy is filed, the Automatic Stay goes into effect immediately. This protects debtors from being harassed by creditors and any collection activities. It allows the individual to pay back their debts in peace without worrying about the stress of creditors.
Contact our Firm
If you or someone you know is facing foreclosure, contact the Law Offices of Allen A. Kobler, Esq. today.
If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.