If you are facing foreclosure, bankruptcy might be able to help. Although a Chapter 7 bankruptcy will only delay the foreclosure through the "automatic stay," some debtors may be able to save their home by filing for Chapter 13 bankruptcy.
When an debtor files for bankruptcy the "automatic stay" goes into effect. This automatic stay is a court injunction that prevents any action to collect a debt from the debtor or the debtor's property. The automatic stay remains in effect for length of the bankruptcy case. Any creditor seeking to collect must get the bankruptcy court's permission in order to continue any type of foreclosure.
Foreclosure begins after a homeowner falls behind on mortgage payments and is in default under the terms of the mortgage. The lender begins the legal process of selling the home at auction in order to get payment for the loan. The process involves numerous steps, including multiple notifications to the homeowner.
In Washington there are two types of foreclosure, judicial and non-judicial. If the foreclosure is judicial, the mortgage holder is required to instigate a lawsuit to "foreclose" on the mortgage. If the foreclosure is non-judicial the mortgage holder can proceed with a foreclosure outside the court system, but must strictly adhere to the requirements imposed by state law.
There are generally multiple options available to debtors going through foreclosure. Some lenders will offer short term repayment plans. A loan modification may also be a option. But if these options have not worked or are not available, it may be time to consider bankruptcy as a possibility for avoiding or stalling foreclosure.
If a you already have a notice of a trustee sale foreclosure. It is important through the foreclosure process to pay attention to dates listed in the notices. If you have received a notice of trustee's sale, contact our office immediately so we help explain your options and determine what steps to take.
Chapter 13 Bankruptcy May Help Save Your House
If you have fallen behind in your mortgage payments and there is no non-bankruptcy way to get current, the only feasible option to keep the home may be to file a Chapter 13 bankruptcy.
Chapter 13 bankruptcy can be extremely helpful with debtors that have accrued multiple unpaid late payments. The Chapter 13 bankruptcy allows debtors with regular income to submit a repayment plan over a certain length of time, either three or five years. The caveat to this is you must have enough income to meet your current mortgage payment at the same time you're paying off the unpaid late payments over the length of the Chapter 13 Plan.
If you have fallen behind in your mortgage, and want to know what your options may be, contact our office to see how we can help. We will inform you of your options so you can prevent foreclosure and remain in your house.