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Help With Foreclosure


Bankruptcy and Foreclosure:

If you are facing foreclosure, and your lenders are refusing to talk with you, filing a bankruptcy is a sure way to start the conversation. Real estate loans are secured loans, meaning that collateral exists. In case you don’t make your payment, the trustee on the Deed can assume ownership of the collateral in benefit of lender.

Bankruptcy Court deals with foreclosure in a very inconsistent manner. Depending on a number of independent variables (such as city and value of the property), a judge can allow debtor to retain ownership of property secured by loans if the debtor signed a reaffirmation of debt agreement with his/her lender. Bankruptcy Court will never discharge secured debts.

Under Bankruptcy laws, in order for a debtor to retain property secured by debts, a debtor must reaffirm his/her obligations by either entering into an agreement or active action (continuing to make payments or not falling behind in obligations). Debtor can seek Chapter 7 or Chapter 13. In some Chapter 13 cases, payments will be entered in the repayment plan.

Bankruptcy Court, in limited number of cases, had allowed debtors to discharge their second and other subsequent loans made on the property. Debtors will need to demonstrate need and reasonable action. For example, Bankruptcy Court will refuse to discharge debts accumulated from Equity Line of Credit where debtor used funds to pursue lavish life style. Lenders will go to great length to prove that funds were used inappropriately.

In addition, when dealing exclusively with home buyers, Bankruptcy Court usually allows distressed homeowners to "strip out" their second loans. In mortgage industry, seconds are subsequent loans secured by equitable values of real estate. Seconds don’t hold much legal strength as first. Thus, seconds are treated similar to credit cards allowing Bankruptcy Court to discharge them.

Finally, as a reminder, each case in the Bankruptcy Court is treated differently. Not all debtors are the same, and the court and trustee understands this fact. Bankruptcy is a very complicated legal procedure. Please consult an attorney with expertise in consumer debts and bankruptcy procedures prior to filing.

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  • Stop home foreclosure
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  • Stop bill collector harassment
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  • Protect co-signers
  • Eliminate credit card debt
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Is Chapter 13 Bankruptcy the Right Option for Me?

A Chapter 13 bankruptcy can stop mortgage foreclosure and other repossessions. Chapter 13 bankruptcy is often a good option for people who are facing short-term financial setbacks, such as a job loss or illness.
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Are you Eligible to File Chapter 7 Bankruptcy?

Chapter 7 bankruptcy can erase your unsecured debts - if you qualify. In order to file for Chapter 7 bankruptcy protection, you will need to meet certain requirements laid out by the bankruptcy courts: Means test, credit counseling and debtor education.
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Thinking About Filing Bankruptcy?

Filing bankruptcy may clear debt, prevent foreclosure and stop creditor harassment. If you are suffering under the weight of debt, need your debt eliminated or need additional time to repay your bills, bankruptcy may be a good debt-relief option for you.
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