Home ownership is a milestone in life that lays a solid foundation for your future, especially for younger people who may be considering starting a family and being able to leave something behind for future generations. For most people, achieving this dream requires taking on a mortgage which is the simplest option, however, default in payments can lead to foreclosure.
Nobody wants to be in foreclosure so it’s important to note that you may have a chance to save your home through bankruptcy. And an experienced bankruptcy attorney can help determine if you qualify. Foreclosure sounds complicated and for most people it is, but if you have an understanding of the process, and representation from a reputable bankruptcy firm, you’ll get through it and be able to move on.
So, what happens in foreclosure? We’ve simplified the process below.
First, you get a default payment notice from the lender, who then files a default notice. Next, a sale notice gets filed. Eventually, your property may be auctioned.
If you’ve got a mortgage and haven’t kept up payments, the lender can take your home and sell it to get their money back. This is foreclosure. There are steps that happen before you lose your home. They are as follows.
The Initial Notification
If you’ve missed payments (it doesn’t have to be 90 days in a row), your lender tells you. They may give you up to 90 days to get back on track. If you don’t, they can file a notice of default. This shows they may sell the house.
A Notice of Default has been Filed
Once a lender has filed a notice of default you will receive a copy of the document which indicates to you that they have begun the process of foreclosing on your home. From the date of this notice being filed you have 90 days during which you still have the ability to reinstate your mortgage by covering the full value of the debt owed. If you are unable to do this before the deadline your home will be put up for sale and auctioned. You will receive notice of this action once it has been filed.
You are Notified of the Sale of your Property
If you fail to repay your debt within 90 days of your notice of default being filed you will receive notification on the sale of your property. This will include the auction day which is generally 21 days after the notice of sale has been filed. You are now in pre-foreclosure and must cover your debt within five days of the auction after which you will lose your ability to reinstate your mortgage and your property will be sold.
Process Variations
Although this is the general process used for foreclosure laws and redemption periods vary based on state and it may be valuable to consider any variations that may exists that may give you an opportunity to retain ownership of your home.
Related Questions
What additional consequences can you face when your home is foreclosed?
Apart from losing your home, your ability to get another is significantly diminished. You will be unlikely to receive relocation assistance and your credit may not allow you to receive the financing you need to get a new home.
Since the auction of your home is listed in newspapers, it may also cause a great deal of embarrassment in addition to the stress of not having anywhere to live.
Does foreclosure erase your debt?
It might not. Your house’s auction sale amount could leave unpaid debt. Say your defaulted amount was $100,000.00 and your house sold for $90,000.00 at auction; you have to pay the remaining $10,000.00.
From the moment you receive your letter notifying you of your default in payment to the moment your home is auctioned is a period of 6 months – 9 months. This may be longer based on the amount of time your lender is willing to extend for you to catch up with your payments.
Consider your options by speaking with a trusted bankruptcy attorney. Filing for bankruptcy will provide protection from creditors until you’ve explored your options. If you are working and have an income, Chapter 13 can help keep your home.
Massachusetts Bankruptcy Representation
If you are facing foreclosure and have questions about the process or want to explore your options, the bankruptcy attorneys at Hines Law in Massachusetts can help. We are a full-service bankruptcy firm that has been providing sound advice and affordable bankruptcy solutions for residents throughout Boston and surrounding areas. Don’t wait, call for a Free Consultation so that you can take control of your finances, save your home, and establish a secure future.