Stop Foreclosure on Your Home
At Financial Law Group in Oakland, we help clients stop foreclosure and take all available steps to save their homes. Contact us to schedule a free consultation.
Using Bankruptcy Protection to Stop Foreclosure
Every foreclosure case is different, and there is no one-size-fits-all solution. There are several ways, however, that filing bankruptcy can stop foreclosure and save your home.
First and foremost, filing bankruptcy will cancel your scheduled foreclosure sale and stop foreclosure from moving forward while your bankruptcy case is in progress. This feature of bankruptcy is called the "automatic stay."
Next, Chapter 13 gives a debtor three years to pay off the arrearage that has accumulated on the mortgage debt, as long as she/he can also make the normal monthly mortgage payments.
Finally, junior liens (i.e., second or third mortgages) may be "stripped" if they are completely unsecured due to the house being worth no more than the first mortgage and if they are normal liens, that is, not equity lines of credit. This will reduce the monthly mortgage payments by reclassifying the junior lien(s) as unsecured debt that will usually receive only pennies on the dollar.
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