Dubiln Packard

Foreclosure

Everything you need to know about

Foreclosure

  • Foreclosure Defense
  • Loan Modification

and your options to purchase, refinance, sell, liquidate, surrender, or foreclose your property in the State of New Jersey.

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How Bankruptcy Can Keep You In Your Home

how bankruptcy can keep you in your home new jersey lawyer Bankruptcy Can Allow You To Catch Up On Missed Mortgage Payments And Save Your Home From Foreclosure

If you’re struggling to make your mortgage payments and have determined that the solutions listed in: I’m Falling Behind On My Mortgage Payments, Are There Ways To Fix The Problem?, don’t work for you, then a bankruptcy may be the best strategy to keep you and your family in your home.

Chapter 13 Bankruptcy Can Keep You In Your Home

A chapter 13 bankruptcy can allow you to put a repayment plan into place. This option requires that you have a form of income in order for you to make the new monthly payments to pay back your missed mortgage payments. Your total missed payments are added to the principal balance of your loan, with this new amount, a new interest rate is calculated and a new term is given. This can be a great option for those looking to save their home from foreclosure.

A chapter 13 bankruptcy can even stop a sheriff sale the night before it’s scheduled to happen, and can keep you and your family in your home.

But don’t wait until the last minute, it becomes harder to make a chapter 13 bankruptcy work with the more missed payments you have, because it makes the overall monthly payments higher.

“I was trying for months to get a loan modification but every time the bank told me I didn’t qualify. Then we found Todd Murphy Law and filed a Chapter 13 Bankruptcy right before our home was sold at a sheriff sale. Wow! Were we glad we did. We were able to pay back all our missed payments over 60 months and started to pay our mortgage again right away. A Chapter 13 Bankruptcy saved our home when a loan modification could not.”

-Jack, Chapter 13 Bankruptcy Client

What Are My Other Options?

If you don’t qualify for a chapter 13 bankruptcy but still want to save your home from foreclosure, discover how a chapter 20 bankruptcy could keep you in your home, read our post: What If I Don’t Qualify for A Chapter 13 Bankruptcy But I Still Want To Save My Home?

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What If I Don’t Qualify For A Chapter 13 Bankruptcy But Still Want to Save My Home?

don't qualify for a chapter 13 bankruptcy but still want to save your home lawyer new jersey foreclosure loan modification Don’t Qualify For A Chapter 13 Bankruptcy But Still Want To Save Your home From Foreclosure? There is still hope.

It is possible that you tried and failed to get a loan mod, and then also discovered that a chapter 13 bankruptcy was not a good option for you. But, there may still be one more option left if you want to save your home from foreclosure.

The main factor that would hold you back from being eligible for a chapter 13 bankruptcy is having too much consumer debt. Certain qualifiers stipulate the amounts of secured and unsecured debt that you’d have to pay if you want to enter into a chapter 13 bankruptcy. If you have too much unsecured debt, i.e. medical debts, payday loans, credit card debts, then you may still be able to get a chapter 13 bankruptcy, and here’s how…

First You File For A Chapter 7 Bankruptcy, Then You File For A Chapter 13 Bankruptcy

This tactic is called the “chapter 20 bankruptcy”. By filing for a chapter 7 bankruptcy first, you can eliminate 100% of your unsecured debts, which were holding you back from making a chapter 13 bankruptcy work for you.

To learn more about when a chapter 7 bankruptcy is used, read our post: When Is A Chapter 7 Bankruptcy Useful?

Once the chapter 7 case is completed, you can file for a chapter 13 bankruptcy which will then allow you to catch up on missed mortgage payments through a repayment plan.

This repayment plan will take place over a 60 month period during which you will make 60 equal payments to pay back all of your arrears (missed payments). While paying back your missed payments, you are also paying your normal monthly mortgage payments.

Once your in a chapter 13 bankruptcy plan, you may also then be eligible for a loan modification to reduce your monthly payments. A loan modification could lower your interest rate and adjust your term.

To learn about how a chapter 13 bankruptcy could save your home, read our post, How Does Bankruptcy Help Save My Home In Foreclosure In New Jersey?

All Of Your Problems Solved With A Chapter 20 Bankruptcy

So… you started out not qualifying for a loan modification, nor a chapter 13 bankruptcy, but by doing a chapter 20 bankruptcy, you have solved all of your debt problems and saved your home!

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I’m Falling Behind On My Mortgage Payments, Are There Ways To Fix The Problem?

I'm falling behind on my mortgage payments new jersey lawyer loan modification“I’m Falling Behind On Mortgage Payments, Are There Ways To Fix The Problem?” First – You’re Not Alone, AND Yes, There Are Ways To Fix The Problem

Thousands of people struggle to make their mortgage payments, especially after significant life changes, like loss of employment, death in the family, changes in income, and other factors that are out of our control. But, if you have just begun  falling behind on your mortgage payments, you can still take control, and you have a number of options and strategies available to remedy the problem.

Before Considering Any Of These Options, You Need Income

If you are just beginning to look into ways to fix your mortgage problems, first and foremost – before you can put a strategy into place –  you must have a form of income, or you need to find one.

These Are The Options That Can Help You

  1. Home Loan Modification

    Home loan modification is usually the best option for those who need a reduction in their monthly mortgage payments; it is the most popular solution. In a loan modification, we look at the principal balance of the loan, and the total of the missed payments. These numbers are added together to establish a new principal balance for the loan. Then, using a new interest rate of around 4%, and a new term of 30-40 years, a new monthly payment is calculated. If you have enough income to support that monthly payment, your problem is solved.

    To learn more about loan modification, read our post: Why Is Loan Modification The Best Tool?

  2. Refinance

    Refinancing could be a good option for you if you have a difference in the amount owed on the home and the value of your home, also termed equity. Refinancing could allow you to get a new mortgage and reduce your interest rate. However, this is usually only an option if you have not missed payments yet, only if you are just beginning to realize that your mortgage payments are too high to manage, but you’re still current on payments.

  3. Temporary Interest Rate Reduction

    A temporary interest rate reduction could be appropriate for you if your income has recently been reduced, but there is a foreseeable increase again in the near future; it will reduce your monthly mortgage payments for a short period of time. For example, it could be appropriate if you have taken a temporary leave of absence from work, or your hours have recently been cut, but they will return to normal soon. A temporary interest rate reduction is only a short term fix to the problem, and the issue must be addressed at a larger scale if your decrease in income is not short term.

  4. Forbearance

    Forbearance results in a temporary reduction or suspension of mortgage payments. It could be the answer to your mortgage payment problems if the problem is temporary and has an end in sight. For example, forbearance could be an appropriate solution if you had to take a medical leave of absence from work, you have experienced a death in the family of someone who contributed to the household, natural disaster has affected your living arrangements – like a flood or hurricane, or another issue that has affected your home short-term. Before entering into a forbearance agreement, it is crucial that you’re assured you will have income in the near future, enough to repay the payments you had missed during the forbearance period.

  5. Temporary Indulgence

    This could be a viable option if reduction in income will be solved within the period of one month. Temporary indulgence grants the borrower a 30-day grace period during which they don’t have to pay their mortgage. There must be a concrete date under which you will be able to resume making your mortgage payments.

  6. Repayment Plan

    A repayment plan is only granted when your financial hardship has worked itself out, and you have recovered financially. You should only look into a repayment plan if you are able to prove to your lender that you can resume making your normal monthly payments again; while also paying back your missed payments. Under a repayment plan, you usually have to pay back all of your missed payments within a 1 to 2 year period.

  7. Reinstatement

    You must pay back your lender in one lump sum the total of missed mortgage payments. This is usually only a good option if your financial troubles have resolved and you have access to or have saved a large sum of money.

  8. Partial Reinstatement

    You must pay back 50% of what you owe, or more, in a lump sum. You also must negotiate a plan to repay the remaining amount due in missed payments within a specific timeframe.

Don’t Wait To Find A Solution That Works For You

We know it can be confusing to know what option will work best for you, but we are here to help. Our site has a number of resources for you to research all of your possible solutions. But don’t wait. The problem will only get worse if you do not employ a strategy early on. And as time goes on and you miss more and more mortgage payments, it becomes more difficult to find a solution you are eligible for, and if your home goes into foreclosure, the chances of being able to save it decrease drastically if you don’t take action early on.

 

If you don’t think that any of the aforementioned options will work for you, bankruptcy may be an option: read our post, How Does Bankruptcy Help Save My Home In Foreclosure In New Jersey?

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I’m Beginning to Fall Behind On My Mortgage Payments, What Should I Do?

Fall behind on my mortgage payments new jersey lawyer foreclosureMany people struggle to make their mortgage payments, you are not alone. If you’re saying to yourself “I’m beginning to fall behind on my mortgage payments, what should I do now?” Here are some quick and powerful tips that will help you:

 

  •  To answer the question “I’m beginning to fall behind on my mortgage payments, what should I do now?,” you should begin by calling your loan servicer to see what advice they have if you are just beginning to struggle with making your mortgage payments. Your loan servicer is the company responsible for mortgage payment collection. The number to reach them is located directly on your mortgage bill.

    • Your lender will allow you to miss 3 mortgage payments before declaring your loan in default, and then they won’t accept any more mortgage payments.

  • Practice good bookkeeping, this will be important in any solution you may employ down the road if you are faced with needing to apply for a loan modification or file for bankruptcy.

    • It is especially important to have good record-keeping skills if you are self-employed, because it is harder to be approved for a loan modification if you are self-employed, particularly if your finances are not in order or easy for the bank to understand.

  • Keep all of your documents related to your home in the same place, this will make it much easier if you need to call a foreclosure lawyer in the future.

    • The lawyer will need information from you, including home value, mortgage payment, the number of missed mortgage payments, interest rate, expenses, et cetera, so it is helpful if it is all in one place and easy to find.

  • Try your best to keep up with mortgage payments, but don’t be unreasonable. Do not, I repeat, do NOT, begin using your retirement savings or 401K to make your mortgage payments or to pay household bills. This money is nearly impossible to ever replace, and the temporary relief that it provides in paying your bills is not worth the strife that depleting it causes down the road. Further, if you end up filing a bankruptcy to save your home, your retirement money is protected.

  • Research all of your options for saving your home and decide on a solution that works best for your specific situation. Don’t get yourself into a solution that is unrealistic. Usually the best solution for those who have started falling behind on mortgage payments is obtaining a loan modification.

  • Be sure that you will be able to afford the option you settle on. No matter how hard it may be, sometimes moving is the best option if you cannot afford a home-saving strategy, because entering into one that you cannot pay for will only cause more trouble.

 

One of the most important things you can do when you start to struggle making mortgage payments is to learn as much as you can about all of the options that are available. This website is designed to be a great resource for you to do just that.

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Navigating The Foreclosure Process: Where Should I Start?

navigating the foreclosure process lawyer New Jersey1. Educate

First and foremost in navigating the foreclosure process and deciding where to start, begin to educate yourself about the process. We have a plethora of free resources on our website: blog articles about foreclosure, loan modification, bankruptcy, the sheriff sale, and many more topics; we also have educational videos, case stories and helpful webinars which mimic a conversation that you would have with a real foreclosure lawyer if you were to call one– it will go over all of your options.

To learn about how you can save your home from foreclosure, read our post: How Can I Save My Home From Foreclosure?

2. Avoid Scams

Secondly, avoid falling into traps; scams are a dime a dozen. It is highly likely that you will run into some while in the process of trying to save your home, so use your due diligence and keep an eye out for them. Many companies tout too good to be true deals. Most will take your money but don’t actually do anything to help.

3. Remain Strong

The road may get tough, but don’t give up; while the solution you find may have the wonderful end result of saving your home, sometimes the strategies can be hard to navigate, especially things like loan modification and bankruptcy. It can be a long and confusing process to get a loan modification or bankruptcy, but don’t fret, we are here to help you.

4. Decide On A Strategy

If you have just received a foreclosure complaint, you have 35 days to file an answer. To begin, decide whether or not you should file a contesting answer. From there, research what options you have to save your home. Taking all things into consideration, decide if saving your home really is the most realistic choice and the best solution. Then, put your strategy into place.

If you are interested in learning about some of the options you have:

Read our posts, What is Home Loan Modification?  and Learn About A Chapter 13 Bankruptcy