If you’re behind on your mortgage payments and a foreclosure sale shortly, you may still save your home. You can sue for bankruptcy or file a lawsuit against the foreclosure party (the bank) to prevent or at least delay the foreclosure in its entirety. If you have a little more time to spare, you can apply for a loan or other training opportunity.
Bankruptcy filing to end the mortgage
When the auction of the property is scheduled for the following day, the only way to stop the auction immediately is by filing for bankruptcy. As soon as you file for bankruptcy, what is known as an automatic stay will take place immediately. Stay works as a court to stop the bank from foreclosing your house or seeking to reclaim your debt. Any foreclosure must, therefore, stop during the bankruptcy process.
The bank will likely seek to reclaim the residence by filing a motion for the court’s permission to continue the foreclosure. If the bankruptcy court grants this petition and accepts the sale, the sale will be delayed for at least a month or two. This should give you time to consider alternatives to mortgage foreclosure.
File a case to prevent foreclosure
Suppose the bank uses an out-of-court foreclosure process where the sale has been negotiated outside the justice system. You may postpone or stop the sale by filing a lawsuit against the bank to challenge the foreclosure. This tactic typically doesn’t work when the mortgage is in arbitration, since you already have the right to be heard in arbitration at the foreclosure sale.
Allow an amendment to the loan.
While this option does not allow you to wait until the last minute, you can delay foreclosure by applying for a change of loan or some other method to avoid foreclosure, given that a bank may have double-tracking restrictions. Dual control is where the bank continues with foreclosure, while a request for relief is pending.
If your request for adjustment is approved, the mortgage will be postponed indefinitely as long as you keep up with your adjusted payments.
Suppose you face an impending foreclosure sale and are considering any of the options outlined in this post. In that case, it is strongly recommended that you contact your nearest foreclosure or bankruptcy attorney immediately.
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