If you’ve struggled through hard times and are facing foreclosure, the first thing we at The Law Offices of Paul Y. Lee want you to know is that you’re not alone. The second thing we want you to know is that there are options available to you but time is of the essence. Depending on your situation, you may benefit from a loan modification, short sale, or bankruptcy. Read on to learn more and then reach out to us at 951-755-1000 to start the process.
Bankruptcy can protect your home from foreclosure
It’s very simple: Filing bankruptcy can put a stop to a trustee’s sale or foreclosure. When you file for bankruptcy, there is an automatic stay that prevents the foreclosure sale from moving forward. Lenders must wait until your bankruptcy is complete or they can file a motion to have the automatic stay lifted. Either way, you have two main bankruptcy options to avoid foreclosure:
- Chapter 7 bankruptcy may be the right choice if you’re behind on credit card debt as it will eliminate it and allow you time to get current on your mortgage. However, it’s only a temporary option because your lender is able to file a motion for relief and if it’s granted they can eventually sell the house.
- Chapter 13 bankruptcy puts a permanent stop to the foreclosure and is often the choice of a homeowner who’s fallen behind on payments and needs time to catch up on back payments. With this option, you’d continue to pay your mortgage each month but would also pay a portion of what you owe in back payments. Typically, you’d have between three and five years to pay the back payments.
Loan modification may be an option for you
Loan modifications can come in many types. They may reduce your interest rate, extend your loan, or reduce the amount of principal you owe. The bad news is that it can be very difficult to get a loan modification. If you’re able to get a modification, and it actually helps in the long run, then it may be a good choice. On the other hand, if it’s only going to be a temporary fix then you would likely still benefit from talking to a foreclosure defense attorney.
Short sales work for some homeowners
In short sale, you sell the home for less than your current loan balance on the home. Your lender may agree to consider your mortgage paid entirely and take a loss because the amount they get may be the current value of the home. It benefits the lender in that they get a new person in the home quickly, with a minimal loss, without having to deal with the cost of foreclosure.
To learn which option may be best for you, you need to work with a bankruptcy attorney who’s been through this situation many times before. The professionals at The Law Offices of Paul Y. Lee are ready to offer a free consultation. Call us today at 951-755-1000 to find out what your options really are.
