HOW CAN WE HELP?
First, let us
prepare you and offer you some initial clarification about your situation. Then, we will review your options.
WHAT
SHOULD YOU DO WHEN FACING A FORECLOSURE?
WHAT
IS THE TYPICAL FORECLOSURE TIMELINE?
Pre
FORECLOSURE/COLLECTIONs
Courtesy
reminder calls usually after first or second late or missed payment, followed
by late notices, threats implying foreclosure
Letter of
Intent to FORECLOSE
Written notice
giving Borrower 30 days to cure default and avoid further legal action
FORECLOSURE
Lender files
lawsuit in FORECLOSURE / You are served and given 35
days (in NJ) to respond. If you do not,
lender files a default and is awarded final judgment. If you do, the matter will be scheduled for
court before the final judgment of foreclosure is granted. In either event, legal fees will typically
accrue to your balance owed. Once the
judgment is entered, the Sheriff is authorized (Writ of Execution) to conduct a
public sale.
SHERIFF’S SALE
Sheriff will
advertise sale in local papers / highest bidder is awarded your HOUSE
RIGHT OF
REDEMPTION
Former
homeowner has 10 days to "redeem" and buy back the house paying all
amounts due including the entire mortgage(s) balance, foreclosure costs, etc.
SHORT
SALE: Bank or mortgage holder agrees to accept a lower amount than what is due
as payment in fill for the mortgage and arrears that you owe them.
PAYMENT
WORK OUT: Getting the Bank and mortgage company to accept a payment schedule or
readjusted mortgage to allow you to catch up on your arrears
SELL
HOME, RETAIN EQUITY AND BUY A DIFFERENT HOME WHERE POSSIBLE: The deeper you go into foreclosure, the more
equity you may lose and the more risk you take.
BANKRUPTCY:
The least favorite option giving the ultimate impact it will have on your
financial future. However it may also
give you the opportunity to save your home by working out an acceptable payment
schedule with bank or lenders.
DO
NOTHING: Many times when faced with the possibility of foreclosure, the
affected homeowner will avoid dealing with their lender until it’s too
late. If you fall behind on your
mortgage payments, you need to be proactive.
The longer you wait, the more equity you may lose and the closer you are
to being foreclosed on. If you do
nothing, you will lose your home.
WHAT
WILL HAPPEN TO MY CREDIT?
If
you allow yourself to be foreclosed on, it may be years before you can buy a
home again with a regular mortgage. For
more information on your rights and how your credit may be affected, click
here:
Consumer
Handbook to Credit Protection Laws ~ http://library.hsh.com/?row_id=1228
Credit
Repair Act ~ http://www.ftc.gov/os/statutes/croa/croa.shtm
BANKRUPTCY FILING...
Chapter
7, known as straight bankruptcy, involves liquidating all assets that are not
exempt. Exempt property may include cars, work-related tools and basic
household furnishings. Some property may be sold by a court-appointed
official-a trustee-or turned over to creditors.
Both
types of bankruptcy may get rid of unsecured debts and stop foreclosures,
repossessions, garnishments, utility shut-offs, and debt collection activities.
Both also provide exemptions that allow you to keep certain assets, although
exemption amounts vary.
Personal
bankruptcy usually does not erase child support, alimony, fines, taxes, and
some student loan obligations. Also, unless you have an acceptable plan to
catch up on your debt under Chapter 13, bankruptcy usually does not allow you
to keep property when your creditor has an unpaid mortgage or lien on it.
A
Chapter 13 filing may be the preferred method for consumers with assets they
don’t want to lose, and willing to retire as much of their debts as possible,
but under a less-pressured structure. Some debt balances may be partially
discharged, and the filer agrees to a monthly payment to the trustee for
distribution to the remaining creditors.
Any
bankruptcy is a serious mark against your credit record, but Chapter 13 filings
may be perceived as slightly less serious than Chapter 7 filings since you are
exhibiting an interest in retiring your debts. The previous definition applies
to Tennessee residents. For specific bankruptcy information based on your city
of residence visit www.citylegalguide.com
for more information.
Chapter
13 bankruptcy allows you, if you have a regular income and limited debt, to keep
property, such as a mortgaged house or car, that you otherwise might lose. In
Chapter 13, the court approves a repayment plan that allows you to pay off a
default during a period of three to five years, rather than surrender any
property.
