It seems like every week, I get a telephone call that generally goes like this:
"The sheriff's sale was last week. Can you help me save my home?"
I reply, "Why did you wait?"
Typical answer is: "I was working with the mortgage company on a loan modification. They said it looked good, so I didn't do anything."
Once there is a sheriff's sale (or more technically a judicial sale), a Chapter 13 cannot save your home, but before that date, filing bankruptcy can aid you in getting a loan modification.
- Foreclosures and loan modifications work on different tracks. Often, the Bank will orally promise you a loan modification, but it's a mirage. They continue on with their foreclosure action, until your home is gone.
- Mortgage companies don't really want many loan modifications. That is why they make it complicated; often "losing" files; returning documents for minor reasons; making it a long drawn out process. If they really wanted to help they would streamline the process both in terms of paper work and time. They would have counselors working with you to be sure everything was in apple pie order before going to the actual decision makers.
- Foreclosure lawyers make more money when they actually complete the foreclosure.
- Mortgage companies are not your friends. If they can take your house back then sell it to another party, they make their money twice: first, by taking a money judgment against you, and second from reselling your property and (possibly) giving a new loan to the buyers.
Most people don't know you can file a Chapter 13 and still proceed with your loan modification. Many Chapter 13 clients are able to get their loan modified while still in the Chapter 13 case. Because you are in a bankruptcy, the creditor has to stop its foreclosure action and give you time and space to modify the loan. Even filing a Chapter 7 will stay the foreclosure temporarily, and give you a better chance at that loan modification because your budget will improve if you do not owe any other creditors.
A Chapter 13 stops the foreclosure dead in its tracks.
To be eligible you have to have sufficient income to pay your current mortgage, pay some amount to the Chapter 13 trustee to catch up the mortgage arrears, and have enough money to cover your other expenses.
If you are in a foreclosure even if you are working on a loan modification you owe it to yourself to discuss your situation and options with the lawyers at ROBERT J ADAMS & ASSOCIATES. Our consultation is free and confidential.
Robert J Adams & Associates
Serving consumers and homeowners for 35 years.
Robert J Adams & Associates has helped thousands of good people, just like you, save their home. Take advantage of our free and confidential consultation today.