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A foreclosure is a legal process. A lender (your mortgage company) files a foreclosure lawsuit in an attempt to recover the money they loaned you against the home. If you, as a homeowner, default on your mortgage (usually by not making your payments on time) the mortgage company files a foreclosure lawsuit to force a Sheriff’s sale of the home so they can get paid back.
What is a Home Mortgage Foreclosure
A mortgage loan is based on a written contract between yourself and the mortgage company. As you recall, you certainly signed a lot of documents at the time you closed on the house. A mortgage foreclosure is based on these contracts but is also governed by a number of state and federal laws. The mortgage company must follow certain formalities in the court system in order to complete the legal process and eventually sell your home at a Sheriff’s sale.
You still own your home during the foreclosure processMany homeowners mistakenly believe that “the mortgage company and I” own the home. This is not true. When you buy a home and obtain a mortgage, you own the home. To be clear, the mortgage company has a claim or security interest in the real estate. However, you own the home subject to the mortgage company’s claim. The mortgage company cannot simply “kick you out” if you fall behind on payments. It is your home. The mortgage company must go through a formal legal process called a foreclosure lawsuit. A judge needs to sign an order that forecloses your ownership interest for the property to be sold at Sheriff’s sale. This takes time.
Should I Contact an Attorney to Discuss my ForeclosureThe short answer is “yes”. Your home is probably your biggest asset and the mortgage loan is likely your biggest debt. An attorney with experience in foreclosure lawsuits will be able to walk you through the process and advise you on the issues.
The mortgage company must follow all of the legal formalities laid out in the paperwork you signed, as well as the rules set out under state and federal law. You might be surprised at the sloppy practices the mortgage industry followed, particularly during the years leading up to the mortgage meltdown in 2008. An experienced foreclosure defense attorney can review your case and look for the most common defects in the mortgage company’s paperwork or lawsuit.
Depending on your income, you may be able to negotiate your way out of the problem. Under Indiana law, you can request a settlement conference while the foreclosure lawsuit is pending. An experienced attorney can serve as your advocate and help you through the settlement process.
Sometimes, the only thing an attorney can do for you is to buy some additional time. At least you will know your options and understand your rights. The foreclosure process is frightening, stressful and complicated. If you simply cannot afford your home due to a job loss or other drop in income, you deserve an honest answer from your own attorney who has reviewed the situation from your standpoint.
Know the law and the benefits and protections you are entitled to. KNOWLEDGE IS POWER
What do I need to do before meeting with an Attorney?
- Gather all paperwork in your possession from the Court and bring it with you to your appointment
- Bring your documents from the real estate closing, if you kept a copy
- Make a list of mortgage payments you made over the last 24 months (date, amount, check number, etc.)
- Print your credit reports. www.annualcreditreport.com
- We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code
How do I contact Banik & Renner?CLICK HERE to contact us or call 574.293.7170 for more information about forclosesures or to schedule an appointment.
Bankruptcy Frequently Asked QuestionsDoes my spouse have to file for bankruptcy if I do?
No. However, keep in mind that if you and your spouse are both liable on a debt, your non-filing spouse will remain liable on the debt. So, if the non-filing spouse is only liable on a small amount of joint debt, he or she may choose not to file so as to avoid having a bankruptcy on his or her credit report.
Can my boyfriend, girlfriend, significant other or domestic partner and I file for bankruptcy together?
No. Only legally married couples can file a joint bankruptcy. If you have joint debts, the non-filing individual will remain liable on the joint debt. If both of you have significant debt, together or separately, you would both have to file separate bankruptcies.
How long will I have bad credit after filing a bankruptcy?
That is largely up to you. If following the discharge of your debt you are able to avoid negative reports on your credit report, your credit may begin to improve within a year. Generally, most lenders require good credit for 3 years following the filing of a bankruptcy.
If I file bankruptcy will my wage garnishment stop?
Yes. Your employer must receive notice of the filing of your bankruptcy and the creditor must also receive notice in order to stop the garnishment. Your bankruptcy must be filed with the court to stop the garnishment. It is not sufficient to notify the creditor that you intend to file bankruptcy.
How soon will the creditors stop bothering me after I file for bankruptcy?
An automatic stay goes into effect when your bankruptcy is filed. Once a creditor receives that notice from the bankruptcy court the creditor must stop calling you, sending out collection notices and of course, must stop any court actions including garnishments.
Chapter 13 Frequently Asked QuestionsIf I have to pay back debt in a Chapter 13 why shouldn’t I just enter into a debt repayment plan with a debt consolidation company?
In a Chapter 13 most debtors are not required to repay all of their unsecured debt compared to a debt consolidation plan where all of the creditors must be paid in full. In a Chapter 13, any debt that is not repaid is discharged and you pay no taxes on the debt that was discharged. In a debt consolidation plan “debt forgiveness” will result in the creditor sending you an IRS Form 1099 for the amount of the debt that you did not repay.
How many years does a Chapter 13 last?
Most Chapter 13 plans are 5 year plans. In some instances where there is little debt or the debtor is a high wage earner, 3 year plans are possible.
Click here to contact Attorneys at law, Banik and Renner or call 574.293.7170 to learn more about filing for bankuptcy.