Foreclosure Plan B

Bankruptcy stops foreclosures, that’s a given.  Thanks to the automatic stay, a bankruptcy stops foreclosures dead in their tracks. 

Bankruptcy is the silver bullet to stop a scheduled foreclosure sale, guaranteed. 

There’s only one problem though, and it is the single biggest reason why people are unable to stop a foreclosure and it’s something that we’re all guilty of at one time or another.  Procrastination. 

Procrastination hampers your ability to save your home when all else fails.  The moment you get a foreclosure notice, you should start interviewing bankruptcy lawyers, even if you think you can work something out with the mortgage company.  

There are a lot of ways that you can try to stop a foreclosure but those other ways usually involve liquidating assets or making some kind of deal with your existing lender or a new lender to save your bacon.  The problem with those outcomes is, the other party has a choice in the matter.  No matter what you do, they can choose to go back on what you discussed or not discuss anything with you at all.  

In the last few months we have seen a number of clients with mortgage forbearance that will come due all at once.  Meaning those payments you missed in March, April, May and June are all going to be due at one time.  I don’t know about you, but I don’t have enough money laying around to make 3-5 months worth of mortgage payments all at one time.  What we are seeing is that people are expecting to be able to refinance or get a mortgage modification.  The problem with all of that is, the lenders have a choice and they may choose to deny those, especially if you’ve suffered a recent job loss. More often than not, mortgage mods don’t go through and people are often left looking for a bankruptcy lawyer with only hours to spare before their house is sold on the courthouse steps. 

Last minute foreclosure defense

Filing bankruptcy, even just a skeletal one, is time consuming.  To file bankruptcy, you have to do things in a certain order.  You meet with an attorney, you take the credit counseling class, you pay your filing fees and then your case can be filed.  All of that takes time and if you skip a step, it can throw the whole case into limbo. Another thing you need to take time to decide is what chapter is best for me to file.  Beyond all of these other challenges, you’ve got to come up with the paperwork necessary to file bankruptcy.  You need to be able to put your hands on bills, pay stubs and tax returns at a minimum.  Like I said, the automatic stay puts a stop to all collection activities against you but once you’ve stopped it, then what?

What is the next step I need to take in order to save my home.  That’s where an experienced bankruptcy lawyer comes in.  They’ll figure out if you qualify for a Chapter 7 or 13.  They’ll help you figure out if you can afford the house going forward and they will provide you with an honest assessment of your situation so you can make an informed decision that can help you get the best outcome for your particular situation. 

Last lawyer on the bench

Here is where procrastination comes back to bite you.  If you wait until the last minute to file, you’re left with a lot fewer choices when it comes to an attorney.  Generally speaking, same day appointments aren’t going to be available for the best bankruptcy lawyers so you’ll be stuck with someone who may not be as reputable or frankly has no clue what they’re doing.  

Is that the person you want holding the fate of your single biggest asset in the palm of their hand.  A guy whose most appealing quality is the fact that they have some free time on their hands? The reality is, the best lawyers are going to be busy.  They’ve got other cases to work on and they frankly may not be willing or able to drop everything to handle your case.  

Line up help ahead of time

If you’re working on solutions to avoid foreclosure, whether that be a refinance or a mortgage modification, you need to be shopping around for a bankruptcy lawyer at the same time.  

You need to interview your lawyer and know what each of them will need to file your case (HINT: what they should need should pretty much be the same if they’re being honest with you). You need to understand your options and know how your choice will impact your overall financial picture.

If everything goes as planned you won’t need bankruptcy.  However, if something goes wrong at the last minute, you have a plan B.  If you find yourself needing to discuss your options, contact the caring attorneys at Harmon and Gorove today for a free, no obligation consultation to learn how bankruptcy can help you with your foreclosure issues.