The fear of losing your home can be awful. It can keep you awake at night and dominate your thoughts. If you or a spouse has lost a job, if your family has been dealing with medical problems, or if your house payment has increased because of an adjustable rate mortgage, you may be living in fear of foreclosure. If you're behind on mortgage payments, you may be getting letters and calls from your mortgage company — and not being given any real options for improving your situation.
Important Facts About Foreclosure
Foreclosure is a process with multiple stages, not a one-time event. In Missouri, that process requires months of missed payments to have elapsed. While the threat of foreclosure can be real if payments are delinquent, the fact is that your house belongs to you unless and until a foreclosure sale of the property occurs — and, legally, that sale must be announced in advance, in writing, both to you and to the public. A default notice (or another frightening letter) does not constitute a foreclosure; only a completed foreclosure sale does.
While nobody can help you keep a home or car that you simply cannot afford, a skilled bankruptcy lawyer may be able to help you explore your legal options and possibly stop foreclosure, as well as phone harassment, vehicle repossession and garnishment of your wages.
Bankruptcy Could Enable You to Keep Your House
In some cases, filing for bankruptcy can help you stay in your house. This can happen in a few different ways.
- Some bankruptcy filings can stop a scheduled foreclosure sale of a home — an auction sale at which the lender's trustee sells the property to help regain money to cover the mortgage debt.
- Some bankruptcies can be used to bring past-due mortgage payments current. For example, a Chapter 13 bankruptcy can help you get caught up on payments by including mortgage arrears in a three year payment plan.
- By wiping out big payments on unsecured debts like credit cards and medical bills, or in restructuring other payments to an affordable level, a bankruptcy filing can enable some people to afford their monthly house payments again.
Bankruptcy Could Help You Move on to a More Affordable Living Situation
Keeping a house is not always desirable or affordable, even when bankruptcy may be. If your home is significantly "under water" or "upside down" — meaning that its value is lower than the mortgage debt — because of refinancing or declining real estate values, it may not be worthwhile to keep it.
By the same token, if your mortgage payments have become unaffordable due to a permanent drop in your household income or to an adjustment of an adjustable rate mortgage, moving into a more affordable home may be the best move.
We can help you explore options for moving on from a problematic home, which could include:
- Selling your house via short sale or a traditional sale
Allowing the foreclosure process to run its course
- Discharging deficiency debt from a first or second mortgage (or HELOC) through Chapter 7 bankruptcy if you qualify
Explore Foreclosure Alternatives in St. Louis County
Every financial situation is different and every mortgage is different, but foreclosure can be prevented in many cases. It is important to talk to an experienced bankruptcy lawyer for advice about your situation if you are considering bankruptcy. Contact us to learn more.