Foreclosure Defense In Bankruptcy Cases

Foreclosure is the process in which a bank takes title to real estate from the owner to satisfy a debt. If you've become behind in your mortgage payments as part of your challenges with debt, it is possible your mortgage company could begin foreclosure proceedings against you.

The law firm of Kevin J. Pratt, Trial Lawyer, frequently helps bankruptcy clients preserve their ownership of their home. Our firm knows federal and state bankruptcy provisions and can provide you with sensible, candid advice about your financial options.

Questions To Ask When You Are Facing Foreclosure

Your options related to retaining your home in bankruptcy depend heavily on your precise financial situation. Here are some important questions a person facing foreclosure in Atlanta should consider:

  1. Is the property worth more or less than the amount owed to the bank?
  2. If it is worth more, you have a financial interest in keeping the home.
  3. Is your home worth less than the amount of your first mortgage? If the answer is yes, and you have a second mortgage, you may be able to eliminate your second mortgage completely.
  4. Do you have a loan or equity loan on the property? If there is a second loan or equity line on the property and the first forecloses, the second lender can still sue you for the debt.
  5. How many people own the home? If married, are both spouses on the deed?
  6. Is the mortgage payment more or less than you would pay to live somewhere else?
  7. Does the home need a lot of maintenance that will require additional funds to keep it in good condition?

Thinking through the answers and bringing them to your initial meeting with your bankruptcy attorney will help provide them with a clear picture of your circumstances.

Filing Bankruptcy Immediately Stops Foreclosure

Regardless of whether you intend to file Chapter 7 or Chapter 13 bankruptcy, once you have officially filed, foreclosure proceedings are immediately suspended.

In a Chapter 7 bankruptcy, if you are current on the payment and you continue making the regular monthly payments, you can keep the home. If the home is worth less than your first mortgage and you have a second mortgage or equity line, you may be able to eliminate your second loan completely and still keep the home. This is called lien stripping.

With Chapter 13, it does not matter if you are current or behind on payments. As with Chapter 7, if the home is worth less than your first mortgage and you have a second mortgage or equity line, you may be able to eliminate your second loan completely and still keep the home through the process of lien stripping. Also, the balance of the loan (including any late payments, interest or late fees) gets paid in the bankruptcy plan, which is a written plan approved by the court to reorganize your debts.

More Questions About Foreclosure And Bankruptcy?

Contact our office in Suwanee for knowledgeable legal advice related to bankruptcy. Call 770-614-4811 or email us to set up your free initial case consultation.

Under federal law, we are designated as a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.