Facing the foreclosure or loss of a home in which you’ve created vital memories and relationships is one of the most difficult situations one can face. Not only is the homeowner haunted by the fear of losing a home, but (s)he can consider it a loss of identity in the community. However, the homeowner should not simply accept the foreclosure as inevitable. In many cases, a well-timed or emergency bankruptcy filing can delay or stop the foreclosure proceedings and protect your home.
The experienced bankruptcy attorneys of The Bankruptcy Group have assisted numerous homeowners delay and even stop foreclosures. Keep in mind that the longer a homeowner waits to obtain legal help, the fewer options (s)he will have in stopping the foreclosure. To schedule a free and confidential consultation, call our law firm at 1-800-920-5351 or contact us online today.
What Can a Homeowner Expect from the California Foreclosure Process?
Typically, there are two distinct foreclosure processes a homeowner can face: judicial and non-judicial proceedings. In California, the process is non-judicial in nature. This means that the mortgage holder is not required to go to court to obtain permission for foreclosure. Still, these things do not happen overnight; it typically requires the homeowner to be several payments behind before the lender begins a non-judicial foreclosure process.
The lender may send another warning to the homeowner, but the foreclosure process does not officially begin until a Notice of Default is mailed and served upon the homeowner. This notice provides the homeowner a three-month window before the mortgage holder schedules and publishes a date for the sale. The lender must also permit at least 21 days to elapse from the publication of the sale date to the actual sale.
Will Chapter 7, Chapter 11, or Chapter 13 Protect My Home?
In most circumstances, Chapter 7 alone is insufficient to stop the foreclosure of a home. Chapter 7 is highly effective when the individual holds mostly unsecured debts, but is less effective when there are also secured debts. While the homeowner can benefit from the temporary relief of an automatic stay, this relief will eventually expire and can be overturned upon a motion to a court. In fact, in most cases where the bankruptcy is filed following the initial Notice of Default, the court will grant the motion to allow the proceedings to continue, provided that three months have elapsed.
Chapter 11 and Chapter 13 are generally effective at protecting property with secured loans. For Chapter 13, the filer is permitted up to 5 years (60 months) to catch-up on his or her back mortgage payments. The bankruptcy filer must also have sufficient income to not only pay off the unpaid debts, but also stay current with all future, scheduled mortgage payments. Under this Chapter, the creditor must accept a valid repayment plan. Yet, with Chapter 11–which is more commonly used by people with complex finances–the creditors can vote on the plan.
What if I Have a Second or Third Mortgage on My Home?
If you have a second or even a third mortgage on your home, Chapter 13 can provide additional relief through its lien-stripping power. While the first mortgage is typically secured by the value of the home, the second and third mortgage is unlikely to be secured by that same value. This type of scenario is particularly prevalent in the recent housing markets where many homes lost value. This same Chapter can strip additional mortgages from the property, since they are technically unsecured loans. These loans then receive significantly lower priority as part of a debt repayment plan. In fact, under Chapter 13, unsecured loans are assigned the lowest priority.
Work with an Experienced Sacramento Bankruptcy Attorney to Determine Potential Options to Stop Foreclosure
If you are facing the foreclosure and loss of your house or family home, the worst thing you can do is embrace denial and remain stagnant. The more time elapsed following the receipt of a Notice of Default, the fewer options you are likely to have regarding a cease in foreclosure. The strategic and aggressive attorneys of The Bankruptcy Group offer their insight and guidance into how a Chapter 13 bankruptcy or other legal proceedings can protect your home from foreclosure. To schedule a free and confidential consultation, call us at 1-800-920-5351 or contact us online today.