How Bankruptcy Can Help Save Your Home
By David Leibowitz, Illinois and Wisconsin Bankruptcy Attorney on Jan 30, 2009 in Featured, Foreclosure Defense, Foreclosure Process, Mortgage Issues In Bankruptcy
According to a respected Seattle real estate professional, almost 2/3 of the bankruptcy cases sampled in the Seattle area this month involved real estate in foreclosure. The interesting feature of this survey was that most of the real estate was purchased since 2001. According to the author, “most of these property owners had a pattern of refinancing for higher amounts over time. With the House ATM cut off, they’re having financial difficulty.”
There are several important things to remember about how bankruptcy can help save your home from foreclosure.
- If you file a bankruptcy case, you can stop a foreclosure, even if only for a short time.
- Chapter 7 does not allow you to modify a mortgage unless the lender is willing to do so outside of bankruptcy court.
- Chapter 7 may buy you some time if that is important to you.
- Chapter 13 allows you to pay off your overdue payments over time under a plan
- Chapter 13 gives you an opportunity to challenge the amount due or mortgage servicing abuse through the bankruptcy claim process
- Chapter 13 gives you a chance to assert predatory lending claims against your mortgage company, the original mortgage company and even the broker
- Chapter 13, if amended by Congress, by HR 200 and S 61, will give you the chance to modify your mortgage, if your house is now worth less than your loan
We know your house is important to you and your family. We also want you to make good economic decisions. Your bankruptcy lawyer will discuss the costs and benefits of home ownership with you. Your bankruptcy attorney will also help you decide whether it is the best decision for you and your family to try to keep your home. And if this is your choice, your bankruptcy attorney will help you craft the best plan to give you the best chance of winning the battle to save your home from foreclosure.
A couple of things to keep in mind. Chapter 7 does little or nothing to save a house from foreclosure. People that want to save a house file Chapter 13, and I didn’t search for that type of case. Also, I only searched for non-judicial foreclosures, not court actions that might foreclosure the property.
More information about foreclosure in Illinois and Wisconsin is available here: Illinois and Wisconsin Mortgage Foreclosure Defense
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