Home ownership is a major share of the asset portfolio for many people as well being an important part of family life. But if bad luck or financial pressures cause you to fall too far behind on your mortgage payments, the bank may try to foreclose and force you out. If you are in the midst of a foreclosure, or even if the bank has already gotten a judgment against you, it might not be too late to save your home through bankruptcy proceedings. At Gates Law Group, A Professional Corporation, we have protected homes and other properties from the grasp of foreclosing banks and other lenders for four decades.
When a bank loans you money to purchase a home or other real estate, it secures a lien on the property. If you fall behind on your mortgage payments and can’t catch up, the bank has the option of filing an action in state court to foreclose on the property, which terminates your ownership. Filing for bankruptcy almost always stops this process, because it imposes an automatic stay that blocks any attempt by your creditors to pursue their claims outside of the bankruptcy process. There are two exceptions to an automatic stay:
In either case, you will need to prove that you did not file the dismissed bankruptcy in bad faith. The bank can file a motion to lift an automatic stay, although you may oppose that motion and the court will not grant it without good reason. If we represent you, we will take all necessary steps to put the automatic stay in place and oppose any motion to lift it.
Once you have an automatic stay in place, what happens to your home depends on which type of bankruptcy you file. If you want to stay in your house and you are earning enough money to pay off some of your debts, your best option is a Chapter 13 bankruptcy. It requires you to continue to make your current mortgage payments but it may give you three to five years to pay off the arrears. If you don’t have enough money for a Chapter 13 repayment plan, you may be better off filing for Chapter 7 bankruptcy. Although the bankruptcy trustee appointed to manage your bankruptcy will likely sell your home to pay your creditors, you have the option of requesting a homestead exemption, which means that when the house is sold, you get paid up to the limit of the exemption. Meanwhile, the automatic stay gives you time to find alternative housing or, possibly, work out a deal with the bank. As your bankruptcy counsel, we can advise you on your best course of action and help you achieve the best feasible outcome.
Gates Law Group, A Professional Corporation helps homeowners stop foreclosures through the bankruptcy process. Please call 559-432-9944 or contact us online to schedule a free initial consultation. We serve clients from our main office in Fresno and locations in Paso Robles and Visalia.