Protecting yourself During a Foreclosure with a Bankruptcy Attorney
More and more homeowners are becoming concerned about the prospect of
bankruptcy as well as foreclosure. Those homeowners who feel they may be
facing foreclosure in the near future have discovered that hiring an
attorney experienced in matters of bankruptcy can be a smart move in
terms of providing protection against the possibility of foreclosure.
The reasons for hiring an attorney during this important time of your
life are certainly sound. One of those reasons is the fact that lenders
may attempt to come after you for the rest of the balance on your home's
mortgage even after they take possession of your home if they are not
able to recover enough money from the sale of the home to cover the
total of the balance. This is in spite of the fact that you will no
longer be allowed to live in the home.
It is for this reason that you take steps to ensure
you are as protected as possible. The best way to do that is to obtain
legal representation. You must also understand that the foreclosure
process actually goes through a number of phases and will actually take
some time. This can be used to your advantage because it gives you time
to consult with an experienced bankruptcy attorney. When speaking with an attorney,
it is important that you take copies of all documentation related to
your foreclosure and provide those copies to your attorney. You should
also provide your attorney with all documentation related to your
original mortgage. This will provide your attorney with the information
he or she needs in order to file what is known as a response to the
foreclosure notice your lender has filed against you.
During this time, your attorney will begin working on what is known as
an affirmative defense. It should be understood that the defense will
not necessarily deny the foreclosure allegations that have been made
against you, but will provide a reason as to why you should not be held
liable. Your attorney will also be able to issue counterclaims on your
behalf.
There are two phases during this process which will often take the
longest. They are the documentation and discovery phases. What is
important to your circumstances during this time is that these processes
will provide you with time to remain in your home. In some cases, you
may be able to remain in your home for a year or perhaps even longer.
This will also provide your attorney time to try and negotiate with your
lender regarding a compromise. Such a compromise might include a loan
modification. If you are not familiar with a loan modification, it can
include a variety of strategies that can make it more affordable for you
to stay in your home or to at least exit your mortgage as gracefully as
possible. Such strategies might include a deed in lieu of foreclosure, a
short sale, forbearance, reduction in interest, reduction in principle
or refinancing.
In the event you are not able to reach an agreement with our lender,
your attorney may then advise you to file for bankruptcy; either through
Chapter 13 or Chapter 7. Your attorney will advise you regarding the
requirements for each type of bankruptcy and which option may best suit
your individual circumstances. While bankruptcy may be a last resort, it
should be recognized that as a federal law, your bankruptcy case will
take precedence over any foreclosure suit that may have already been
filed. This will serve the purpose of immediately putting a stop to any
and all collection attempts, including those from your lender. Once your
attorney has filed the bankruptcy case, the court will order a stop to
the foreclosure suit and this will prevent the lender from taking
possession of your home. The lender will also be stopped from any
eviction efforts or attempts to sell your home. You will also receive
additional time through the bankruptcy suit in order to work out other
possible solutions with your lender. During this time you will be
allowed to remain in your home.
There can sometimes be a temptation among homeowners facing foreclosure
to simply allow the lender to take the home and walk away. That may not
always be the case; however. This is particularly true if the lender
opts to come after you for the balance on the mortgage, even after they
have taken the home. Hiring an attorney to represent you during this
difficult time can be a wise investment that may even allow you to stay
in your home.
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