Emergency Steps to Stop a Foreclosure
Listen to an audio message about stopping a foreclosure.
Click on the play button below to hear a welcome message
- Avoid frauds and rip offs.
You will receive in the mail sometimes dozens of letters from so called "helpers" offering assistance. They are virtually all scam artists to some degree or another. Read these two links for added information. Forbes. Consumer Advisory. - How fast can a foreclosure be stopped?
A foreclosure can be stopped within days and sometimes even faster if necessary. However, the closer to the foreclosure sale date you contact the attorney the less likely an attorney might be willing to accept your case. Most attorneys have learned that cases filed the last minute are often full of problems. Chapter 13 is complicated. A lot of paperwork is required including proof of income for the last six months, bank statements, and copies of the last two years tax returns. In addition, a class is required to be completed normally by phone or internet at least 24 hours before the bankruptcy. When a client comes to us a few days before a foreclosure we want to know why. It often indicates that there might be serious problems with the chance of success. Is there equity in the property that makes sense to keep the property or possibly give the client time to sell the property and get his equity out of it? If the client wants to keep the property, is the client now able to resume the payments, i.e. is there sufficient income? Why did they wait so long to contact us? We have had a lot of experience with filing cases just before a foreclosure. However "last minute" filing is not preferred. If you have a pending foreclosure it is best to call us immediately to discuss your options. - How does a foreclosure take place?
Most homes are sold under a trust deed. This provides that if you are in default (missed payments) the lender can begin a trust deed foreclosure. You are given notice of a "sale date" four months away. This is the date the home is sold usually taking place at the local courthouse. Up to five days before the "sale date" you can catch up on the missed payments and "reinstate" the loan with the lender stopping the foreclosure. If you wait too long, between five days before the sale and the sale date, you have to pay the entire balance of the loan to stop the foreclosure. When the home is "sold" in a trust deed foreclosure all your rights are gone. You will have 10-14 days to leave and if you do not leave the lender can bring eviction proceedings. After a trust deed foreclosure some lenders will offer what they call "cash for keys" as an incentive for you to leave the home broom clean without vandalism. A trust deed foreclosure normally will not begin until you are at least three months in default. What you should understand then is that you can live in your home without making a payment for at least seven months and perhaps longer. - Are how many mortgages I have on my home important?
YES! You must understand that the number of mortgages you have affects your options. If you only have one mortgage then you can choose to do nothing. There is no deficiency for a first mortgage (trust deed). This means the lender simply gets the home back. You will not owe the difference between what the home is worth and what you owe. You can try to sell your home while it is in foreclosure if it has equity (meaning it is worth more than what is owed). - What if I have a second or more mortgages?
Additional mortgages mean more complications. If the home is foreclosed, normally the 2nd mortgage will not bid at the sale. This means that you will still owe the 2nd mortgage and it becomes an unsecured debt like a credit card or medical bill. 2nd mortgages force many people into bankruptcy after a foreclosure. It is important that you understand that it is possible to eliminate a second mortgage as a lien on your home in a chapter 13 if the home is worth less than the first mortgage. For example, let us assume you have a home that you owe $225,000 on the first mortgage or first trust deed and you have a line of credit or second mortgage or trust deed for $50,000. Because of a decrease in real estate values your home is only worth $200,000. We can file a chapter 13 and propose to catch up on the missed first mortgage payments. We then can file a proceeding in the chapter 13 alleging the value of the home as less than the first mortgage, proposing to eliminate the 2nd mortgage as a lien. It is important to understand this, because if your budget allows you to keep the home if you only have to pay the first mortgage, you may decide you want to keep the home! - I understand this but I cannot even afford the first mortgage.
If you have only one mortgage and have no other debt problems then there is no need to file any form of bankruptcy. You can simply let the home go back. If you have a second mortgage then it is very likely that it will survive the foreclosure and become an unsecured debt. It can be resolved in a regular bankruptcy. You can always attempt to sell the home while it is going through foreclosure. In some instances we can file a chapter 13 to delay a foreclosure sale to allow the home to be sold and homeowner be allowed to collect his equity. Remember you can stay in the home "rent free" while it is in foreclosure. - What is a short sale and will it benefit me?
A short sale short sale is when a lender agrees to accept less than the full amount of the debt when the home is sold. Normally your realtor will handle the details and negotiations with the lender. They are, after all, getting paid a commission. You should not agree to pay one penny to complete a short sale. Remember there is no deficiency for a foreclosure in a trust deed sale involving only one mortgage. Make sure if you do a short sale involving a 2nd mortgage that it also be eliminated. If it is still owed after the short sale and not waived the short sale did not help you. Make sure that in a short sale the second mortgage is resolved and balance is NOT left owing. - How does chapter 13 allow me to keep my home?
Chapter 13 is a form of bankruptcy. All your assets and debts are listed. When the case is filed, the foreclosure is stopped. A chapter 13 plan is filed which provides that you will resume your mortgage payment, first and second (if the second is not being eliminated). The amount you are behind determines your payment. Let's say, for example, that you are $10,000 in arrears. That sum is paid through the chapter 13 plan through a period of time as long as five years. That would be a payment of $166 per month ($10,000 divided by 60 months). It is possible, depending on the circumstances, to tier the chapter 13 payments, meaning starting out smaller and then raising the payment over time. The normal mortgage payment however must be resumed after the chapter 13 is filed. Chapter 13 will also resolve other debt problems, including past due income taxes, past child support, unsecured debt, traffic fines and almost everything else. - How much does it cost?
A chapter 13 bankruptcy is more complicated then a chapter 7 bankruptcy and more expensive. However we generally structure our fees to be paid through the chapter 13 plan from the payments you make to your chapter 13 plan. Often we can file a case for as little as $300 which includes the filing fee. We can do this because we file so many cases and are confident in our client's success. We don't get paid unless you succeed. Compare that to the rip off artists in the first point above. - Who do I make my payments to and how much will my payment be?
Your payments are made to a chapter 13 trustee. There are two main chapter 13 trustees in Oregon and three in Washington (Brian Lynch - Northern Oregon, Fred Long - Southern Oregon, David Howe - Tacoma, K. Michael Fitzgerald - Seattle, Daniel Brunner - Spokane Washington). Your chapter 13 payment depends on what debts have to be paid. We draft the chapter 13 plan with your assistance. You will know exactly what your payment is before the case is filed. Our clients are generally shocked about how much their total outgo has decreased. - What if circumstances change?
Chapter 13 is completely voluntary. This means the case can be dismissed by you at any time. You are simply placed back in the position you were in before the case was filed. Life obviously is never certain. We will be there to help you decide what is best if your circumstances change. We have been doing this for years. - Why should I choose you for my attorney?
I believe our firm has filed more chapter 13s then any other law firm in Oregon and Washington. We have been in this field now for over thirty years. The four partners in the firm have a combined experience of over 100 years. We have an actual physical office near where you live. Search our web site. I believe you will agree that we know what we are talking about. We are busy -- very busy. I believe there is a reason for this. This is a complicated field and, in our opinion, requires years of experience. We have been through almost every scenario imaginable many times. With our firm you will never feel that you are an "experiment." We will always be there, before, during, and after the chapter 13 is filed. We are your attorney during the entire length of the plan. - I still have questions.
We are here to help! We have always had a policy to speak with potential clients at no charge while they are making this important decision. This is a complicated area and we discourage you from coming to any firm conclusions from what you have read here. There are many factors that determine the path that is best for you. Many of our clients remark "I had no idea we could do that" after they meet with us. There are so many options and so many paths that you must speak to someone experienced in this field about your personal situation. We have an office where you live. Please look below and call our office for a free consultation by phone or in person. We will consult with you as many times as necessary at no charge while you are making this decision.