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Foreclosure Doesn’t Stop While You’re Applying For A Loan Modification

loan modification application lawyer new jersey Most People Don’t Know That A Foreclosure Doesn’t Stop While You’re Applying For A Loan Modification, But Don’t Get Discouraged

If you are having a hard time keeping up with your mortgage payments and have begun the process of applying for  a home loan modification. There is something you MUST know.

Loan modification does not immediately put a halt to the foreclosure process

Just because you are working with your lender to obtain a loan modification, doesn’t mean that the foreclosure process has stopped. Frequently, the lender won’t push the stop button on the foreclosure process even while you are negotiating with them to get approved for a loan modification.

The process of obtaining a home loan modification can take as little as a few days, or a few months.  It is often prolonged due to errors with sending in documentation. During this time, don’t be surprised that you will still be receiving papers from the court regarding your foreclosure.

You won’t know that you have stopped the foreclosure proceedings until you receive a formal stay or dismissal from the court.

But, don’t get discouraged, once you obtain your loan modification, you will have successfully stopped the foreclosure.

Try and send all of your documents in the right way, so you can expedite the process. To find out how, read about it here.

To find out what mistakes to avoid, read our post: The Two Biggest Reasons People Fail To Get Loan Mods

If Loan Modification Does Not Work To Stop Your Foreclosure, Don’t Give Up

If you come to find out that you cannot obtain a loan modification, you still have some options to save your home from foreclosure. Chapter 13 bankruptcy may be a good option to save your home from foreclosure. It is a repayment plan which allow you to get current on your mortgage payments. It allows you to pay back all of your missed payments over a 60 month period, while also making your normal monthly mortgage payments. To find out how this could work for you, read our post: How Bankruptcy Can Keep You In Your Home

 

 

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Don’t Save Your Home From Foreclosure: Prepare For A Bright Future With A Fresh Start

foreclosure: prepare for a bright future chapter 7 bankruptcy foreclosure lawyer new jerseyIf You Can’t Save Your Home From Foreclosure: Prepare For A Bright Future Using A Chapter 7 Bankruptcy.

You may have entered the foreclosure process with the mindset of wanting to save your home, but you discovered that you can’t save your home from foreclosure.  Try this strategy – benefit from the lengthy process of foreclosure: prepare for a bright future.

Sometimes saving your home from foreclosure is just not the most realistic path to take, we know how hard it can be. Loan modifications are difficult. Not everyone qualifies for them, and many struggle working with their bank to get approved for one. Often times, you get denied time after time.

And, a chapter 13 bankruptcy is often used to save homes from foreclosure, but they are very hard to manage and require you to make huge monthly payments for 60 months to try and pay back missed mortgage payments. Depending on your situation, it can be a leap to try and make one work for you.

So, as hard as it may be to overcome, you’ve determined that saving your home is not a good strategy for you. You’ve come very far and made a huge decision. Now that you know you will be moving in the near future, you are wondering how you will get back on your feet again after the sheriff sale.

A Chapter 7 Bankruptcy Can Help You Get Back On Your Feet Again

There are two points in time when a Chapter 7 Bankruptcy can be helpful to you if you’ve determined that you can’t, or don’t want to save your home from foreclosure.

Scenario 1: There is no impending sheriff sale, and you are fairly early on in the foreclosure process.

You are going through the foreclosure process and have done a lot of your research, or maybe spoke to a foreclosure lawyer about your options for saving your home, but decided that saving your home is not in your cards.

Filing a chapter 7 eliminates all of your personal obligations to pay any and all debts. This then allows you to start rebuilding your credit right away since you do not have any debts.

At the same time, since the foreclosure process is just getting started, you can live rent-free for months before a sheriff sale can be scheduled which means you can save money that you would otherwise use to pay your mortgage or rent.

It is even possible to rebuild your credit from what may be 580 or 590, to 680 or 690 within 12 months. This score is good enough to buy a car at the best rate. After 24 months, you can be as high as 750. If you put the $2000 a month you might be paying rent with in the bank for 12 months you would have $24,000 and after 24 months, $48,000 and coupled with a 750 credit score, you could be in pretty good shape after 12 or 24 months.

Using the very lengthy amount of time that it takes to foreclose on a home to your advantage, you can eliminate all of your debts now, live rent-free during that time, rebuild your credit, and even save some money for the future.

 

 

Scenario 2: You have an upcoming sheriff sale.

If it is just inevitable for whatever reason that your house will be sold at a sheriff sale, you can delay the sale by up to 120 days by getting a 30 day adjournment from the sheriff’s office and then filing for a chapter 7 bankruptcy. With his additional time, you can better prepare for moving and also enjoy the other benefits of chapter 7 bankruptcy.

Assuming you postponed the sale by 30 days with a 30 day adjournment,  (Read More About That Here), filing a chapter 7 will delay the sale by another 90 days and will discharge all of your debts.

Further, it can also help you avoid enormous tax liabilities. Here’s how:

If you don’t file for a chapter 7 bankruptcy, the bank has the right to seek to recover the difference between what the house is sold for and the amount that is owed, this is known as a deficiency amount. However, what is more common is the deficiency amount is forgiven  by the lender and it is then required to be reported to the IRS as income in a 1099 statement and you may have to pay tax on that amount. A chapter 7 bankruptcy protects you against both of these very negative possibilities.

For example, if there is a deficiency amount of $100,000, you could owe up to $50,000 in income tax and you didn’t even get the money! Chapter 7 bankruptcy avoids this issue, provided it is filed BEFORE the sheriff sale. And of course, you get the added benefit of up to another 90 days in the house since the chapter 7 delays the sale by up to 90 days.

A chapter 7 bankruptcy before the sheriff sale will eliminate your debts and buy you extra time in your home so you are well-positioned for the future.

 

 

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10 Things You Should Do If You’ve Been Served With Foreclosure Papers

10 things to do served foreclosure papers lawyer new jersey loan modificationTop 10 Things You Should Do Right Now If You Just Got Foreclosure Papers

 

The Court Says I Must File An Answer Within 35 Days…

If you’ve just received foreclosure papers, you have 35 days to take immediate action, and we are here to help you.

It’s Easier To File An Answer With The Help Of A Lawyer

The court requires that you file an answer to the foreclosure complaint within 35 days if: you are the borrower and you believe that your lender is unjustly foreclosing upon your property. In your answer to the court, you must provide your defense as to why your property should not be foreclosed on, and explain why your lender should not be foreclosing on your home (with supporting documents and proof of your argument).

Understand How You Should File, And What To Do Next

There are two different ways to answer the complaint, contesting or non-contesting. The first thing you should do is find a lawyer to help you determine how to file an answer, and then help you through the foreclosure process.

Here is a quick list of what you should do once you are served with a Summons and Complaint

 

1.  Take note of the date that you received the summons and complaint, whether in the mail or from the sheriff.

2. Add 35 days to the date noted above: this is the date that your answer must be filed by.

3. Find an experienced foreclosure lawyer to help you. Get the best professional help that you can afford.

4. Avoid Scams! Before hiring your lawyer, make sure that they are well-qualified to help you. Do they practice in the state of New Jersey? How much experience do they have in foreclosure law? Do they have a focus in foreclosure law? Are they an out-of-state scam service? Are they just trying to get you into a bankruptcy? – (bankruptcy is not your only option)

5. Discuss with your lawyer whether you will file a contesting or non-contesting answer to your foreclosure complaint.

6. After filing, make a realistic assessment of how you will save your home from foreclosure.

7. Determine if you qualify for a loan modification. A loan modification solves the issue of foreclosure 100% of the time – if you qualify.

8. If you don’t qualify for a loan modification, find out what changes you can make so you qualify; normally it boils down to increasing your income.

9. Learn the tips and tricks to preparing an approvable loan modification application. It can be easy to fail if you don’t know about the process and what your bank is looking for in your application.

10. Educate yourself about all of the options, techniques, and strategies for saving your home from foreclosure. 

 

Conclusion

It is crucial to educate yourself about the overall process of foreclosure, and find out all of your options. Additionally, the foreclosure process can be tricky to navigate by yourself. Find someone who is well-qualified to help you throughout the process and help you save your home from foreclosure. Your lender understands the importance of having legal defense, and will have a lawyer; it is also in your best interest to obtain one.

 

Learn Everything You Need To Know About Foreclosure

In Your FREE SmartGuide: Surviving Foreclosure, you will get:

    • Answers To Your Most Pressing Questions (When Will I Get Kicked Out Of My Home? How Can I Save My Home? …and many more!)
    • Ways To Save Your Home From Foreclosure
    • Secrets Hints To Saving Your Home That Your Lender Won’t Tell You
    • An Invitation To An Exclusive Webinar, How To Save Your Home From Foreclosure
    • Find MY Solution Worksheet- to help determine the best way to save your home

Click Here To Get My SmartGuide To Surviving Foreclosure

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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!