Facing an imminent foreclosure sale with no strategy in place can lead to debtors making impulsive decisions and ultimately losing their home. Our West Palm Beach foreclosure attorneys have decades of experience working with clients in need of immediate legal counsel to help navigate and guide them through their foreclosure alternatives. Here are a few strategies that can be implemented at the last minute:
Filing for Bankruptcy
One of the first ways to stop a foreclosure at the is to file for bankruptcy. A foreclosure sale can be stopped immediately once an automatic stay is filed, which acts as an injunction preventing a creditor from foreclosing on a home or pursuing other debt collection tactics. Once a bankruptcy case is filed the lender can file a motion for “relief from stay,” where a case is presented in the hopes of convincing the court to allow the foreclosure process to continue. Even when the motion is accepted, the foreclosure process is delayed for around a month or two. During this period, our West Palm Beach foreclosure attorneys will help devise a plan of action and explore alternatives to avoid foreclosure.
Chapter 13 bankruptcy allows debtors to reorganize their debts so that they can repay their financial obligations in a realistic amount of time, therefore allowing the owners to keep their homes. A debtor must pay the creditor over a period of three to five years. Foreclosure can be avoided if the debtor settles overdue mortgage remittances throughout the installment plan. Additionally, a portion of unsecured debts will need to be reduced during the payment plan to avoid other debts from arising, such as a second mortgage—technically considered an unsecured loan. Even if someone is unable to settle all accounts entirely, filing for Chapter 13 bankruptcy will still delay the foreclosure case from proceeding.
If someone is already in the midst of a foreclosure case, filing for Chapter 7 bankruptcy usually will not help to keep the home. However, it will stall the foreclosure proceedings and allow debtors to remain in their home for some time without having to make any payments. During this time, our West Palm Beach foreclosure attorneys will help to negotiate with lenders in order to formulate a plan to avoid foreclosure or any additional liabilities. Even if a debtor still goes through foreclosure, Chapter 7 bankruptcy removes the possibility of personal liability for mortgage debt, which means he or she is not responsible for the amount of deficiency after the foreclosure.
Delaying a foreclosure is possible if a debtor decides to apply for a loan modification or foreclosure avoidance option because of dual tracking. When applying for a loan modification in states that use a nonjudicial process to foreclose, lenders are usually restricted from dual tracking, which is when a creditor continues the foreclosure process while a loss mitigation application is pending. If the application is approved, the foreclosure case will be halted dependent upon the modified loan payments being made on time.
Talk to An Attorney
Those facing an impending foreclosure sale who are looking to explore their last-minute options should consult with reputable and expert attorneys. Every foreclosure case is different and requires a unique legal approach, which is why at Kelley, Fulton, & Kaplan we utilize our seasoned experience and knowledge to provide debtors with an individualized and successful defense. Contact us today for your free consultation.