Steps to Take After Receiving a Foreclosure Notice
Do not panic if you defaulted on your mortgage payments and your bank has issued you a routine foreclosure notice. There is hope in saving your house and legal steps you can take to ensure this hope.
A foreclosure notice is sent by your bank when your default on mortgage payments prompts the bank to take steps to repossess your home through a foreclosure proceeding. In accordance with the terms of your loan, the bank may sell your house at a public auction and take the payments of your loan from the earnings of the auction. One way to prevent such a proceeding is to pay the amount in default in addition to other charges that you incurred as a result of your non-payment. However, for those in a financial crisis, such an option is usually not possible.
Filing bankruptcy in Nashville
While options are available to prevent foreclosure, such as loan forbearance or a deed in lieu of foreclosure, one of the most commonly employed actions to take to save a house after receiving a foreclosure notice is to file for a Nashville bankruptcy.
After filing bankruptcy in Nashville, the court immediately issues an Order of Relief. This entails an automatic stay, protecting you from the pursuit of your creditors and their debt collection activities and legally postponing any foreclosure sale that your house may be scheduled for while the bankruptcy is pending.
Usually, filing for bankruptcy postpones a foreclosure sale for three or four months. There are exceptions such as when the lender files a motion to lift the stay and receives permission from the court to proceed with the foreclosure sale, or if the foreclosure notice was already filed and the advance notice required to hold a foreclosure sale has elapsed without you filing bankruptcy. It is important to consult an attorney early in the process.
Chapter 7 bankruptcy
Also known as a liquidation of debt, a Chapter 7 bankruptcy can eliminate the debt secured by your home, including the mortgage. While Chapter 7 cancels most of your debts, it cannot cancel the foreclosure since the house serves as the collateral for the loan. Chapter 7 can be effective for stalling a foreclosure sale and providing you with two or three months to save money and work out a plan with your lender, but it cannot cancel the foreclosure.
Chapter 13 bankruptcy
Also known as a reorganization of debt, a Chapter 13 bankruptcy can give you the chance to develop a repayment plan for your debts that may be scheduled over the course of three to five years. By paying off your current mortgage payments and late, unpaid payments over the allotted time frame, you can avoid foreclosure and keep your home.
Contact us
If you received a foreclosure notice declaring the intent of your bank to sell your home in a foreclosure auction to recover your default of mortgage payments, Nashville bankruptcy attorneys can help you to save your house. Contact the law offices of Burkhalter & Moser, PC for a free initial consultation. We can help you with your current financial crisis.
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