Whether you live in Folsom, Roseville, or Sacramento, home ownership is a key part of the American and Californian dream. Californians work for years and sometimes for more than a decade to finally build up the savings to purchase a family home. Then, they work diligently for decades to care for their home and pay off a mortgage. As anyone can surmise, achieving the American dream of home ownership takes significant work, commitment, and dedication.
Unfortunately, all the hard work you’ve put into your home and life can be jeopardized in an instant. An illness, loss of a job, injury, or other circumstances can make it difficult to pay the mortgage and other expenses. In time, you may find yourself falling behind on bills and obligations. Then you receive a Notice of Foreclosure and begin to fear that your financial problems will result in the loss of your home.
The Sacramento mortgage foreclosure attorneys of The Bankruptcy Group are proud to work with homeowners to stop foreclosures. We can provide legal insight and guidance regarding a number of options you may have to address in a potential or actual foreclosure. To schedule a free and confidential consultation, call 888-710-4334 or contact the firm online today.
Mortgage Modification Can Occur Prior to or as Part of a Bankruptcy Filing
Mortgage modification is often a key component of dealing with a foreclosure whether the modification occurs prior to a bankruptcy or during the bankruptcy process. A mortgage modification offers certain changes to the terms of the mortgage that can make it easier for the homeowner to catch-up and repay the amounts in arrears.
Potential items that may be open for negotiation if the lender is amenable to a mortgage modification:
- Extending the repayment term
- Reducing the interest rate
- Rolling arrears, penalties, and other costs into the principle of the mortgage
- Altering the payment schedule in some other way to make it more likely the mortgage is paid each month
A mortgage modification provides for a flexible framework to address troublesome mortgage provisions. Working with an experienced Sacramento bankruptcy attorney can help you negotiate a modification that addresses your situation and concerns.
A Pre-Foreclosure Forbearance Plan Can Address a Foreclosure
A mortgage foreclosure defense attorney may also consider whether the lender would be open to a pre-foreclosure forbearance arrangement. In an arrangement of this type, the lender will typically agree to postpone the sale of property. In exchange, the borrower will promise to make substantial repayments over a limited window of time. A lender will generally provide up to an additional six months for the borrower to catch-up on arrears,as long as there is a reasonable likelihood that these repayments are achievable.
Chapter 13 Bankruptcy Can Save Home from Foreclosure
In some instances where the homeowner has limited equity, both Chapter 7 bankruptcy and Chapter 13 bankruptcy may be able to save a home from foreclosure. However, in situations where the homeowner has more equity that is not fully protected by California’s bankruptcy exemptions, a Chapter 13 filing is more likely to achieve one’s legal goals.
A Chapter 13 bankruptcy is not liquidation. Rather, the property you wish to keep is protected under a Chapter 13 repayment plan. Under a Chapter 13 repayment plan, you will make a single consolidated payment to the court. The court will then ensure that the correct payments are remitted to creditors. Aside from simplifying your debt payments, engaging in a Chapter 13 plan has a number of additional key benefits:
- The three to five year repayment window can provide a homeowner additional time to catch-up on payments.
- Chapter 13 bankruptcy allows a homeowner to satisfy mortgage payments that are in arrears.
- Chapter 13 bankruptcy can provide a significant savings on payments to satisfy unsecured debts. This can free up additional resources to pay the mortgage.
For many, a Chapter 13 bankruptcy filing can protect and save their home from foreclosure. However, one must fully discuss their situation with an experienced attorney before taking any action to address a foreclosure.
Work with Experienced Sacramento Foreclosure Defense Lawyers
At The Bankruptcy Group, our attorneys can help you address a foreclosure to protect your home. In situations where it may not make financial sense to keep the property, but you still wish to mitigate the consequences of a foreclosure, we can also provide guidance on the short sale process. To discuss your situation with an experienced lawyer, call our firm at 888-710-4334 today.