Falling behind on a mortgage is a common occurrence. While some lenders are willing to work with homeowners, most are not, and they reserve the option to foreclose. A foreclosure in Fairfield, OH, involves the repossessing and sale of the home at auction with the proceeds going toward the mortgage and legal fees. However, most creditors don’t initiate a foreclosure until the borrower is up to three months behind on payments. This gives a homeowner time to consider foreclosure alternatives such as forbearance, a deed in lieu or a short sale. Should these alternatives not work, consulting a foreclosure lawyer may be beneficial.
Delaying Foreclosure Through an Automatic Stay
Foreclosure and bankruptcy are two words no homeowner wants to hear. However, if one faces foreclosure, a bankruptcy can help them keep their home. Once a bankruptcy is filed, the court issues an automatic stay that forces creditors to stop collection attempts. If a foreclosure sale has been scheduled, it is postponed until the bankruptcy case is concluded.
How Chapter 13 Can Help
A chapter 13 case allows the borrower to set up a payment plan in order to catch up. Borrowers should consider that they’ll need enough income to pay both the past due and current amounts. As long as one makes timely payments for the entire plan, they can avoid a foreclosure and keep the home.
Using Chapter 7
A chapter 7 bankruptcy cancels all debts secured by the home’s value, including home equity loans and mortgages. Because of changes in the bankruptcy law, the homeowner is also forgiven for tax liabilities incurred by lenders. However, an exception occurs if the loan is secured by property other than the primary residence.
Losing the Home and the Debt
Not all bankruptcies prevent a person from losing their home, and many think that the process can’t help at all. However, there are benefits other than stopping a foreclosure in Fairfield, OH. Even if the person can’t keep their home, they can visit Dean Snyder, Attorney at Law to find out how a bankruptcy can help them get out from under debt and save money for future hard times.
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