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[Video] Can I Use Bankruptcy to Stop a Foreclosure?

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[Video] Can I Use Bankruptcy to Stop a Foreclosure?


If you miss a few mortgage payments, you’ll soon find yourself at odds with your home loan lender. They’ll trigger the foreclosure process, attempting to have your home sold in order to apply the proceeds toward your mortgage balance. If foreclosure happens, you can lose your home and see your credit score drop drastically. Luckily, this isn’t a process that happens overnight. You’ll receive a notification from the lender that your home is going into foreclosure and the process takes some time. What can you do at this point? A smart homeowner considers bankruptcy, because it halts foreclosure can allow you to remain in your home.

Why is Foreclosure Happening to Me?

At any given moment, about one in every 2,000 U.S. mortgages is in the process of foreclosure. According to Debt.org, a debt assistance organization, the main reasons for foreclosure are circumstances that may be beyond the homeowner’s control: sudden medical bills, job loss, divorce or overwhelming cumulative debt. Plus, a staggering 60% of homeowners facing foreclosure say they don’t fully understand the terms of their mortgage. Foreclosure can be a confusing and stressful time in your life, especially if you aren’t exactly sure what all of it means.

How Does Foreclosure Work?

It varies by state, but generally you will be notified about your missed payments and receive a notice that your home is going into foreclosure. The process typically involves providing public notice, scheduling a foreclosure sale and having the proceeds applied to your outstanding loan amount. In the state of Indiana, the lender must mail a 30-day pre-foreclosure notice to you before going to court for what is known as a judicial foreclosure. The court will usually require the lender to wait three months before continuing with the foreclosure. Before your property can be sold, the sheriff must advertise it once per week for three weeks in a local newspaper. After the sale, the mortgage lender will apply the sale amount to your loan. It’s possible you will still owe the lender additional money after the foreclosure sale, if they didn’t make enough to match what you owe.

Can I Stop Foreclosure From Happening?

At this point, the best way to stop foreclosure is to seek help from a bankruptcy attorney. By filing for Chapter 7 or Chapter 13 bankruptcy, you initiate what is known as an automatic stay, which stops a mortgage company from continuing to act against you. They’ll have to wait while you create a bankruptcy plan that resolves your debts. Chapter 13 bankruptcy is a great choice for homeowners facing foreclosure, because it gives you three to five years to catch up on mortgage payments without losing your home.

How Fast Will Bankruptcy Stop My Foreclosure?

Normally, an uncontested Indiana foreclosure takes about 150 to 200 days to happen, from start to finish. However, bankruptcy interrupts this process and either delays or stops the foreclosure. But you must act quickly. Indiana does not have a post-sale statutory right of redemption, meaning after the sheriff’s sale you probably wouldn’t be able to get your home back even if you make payment in full. Filing for bankruptcy only helps up to the moment the house is sold. Wait too long, and you may lose your home forever.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

Video Transcript

Nobody wants to come in and talk about bankruptcy. But many times my clients feel much better after they’ve been in to talk to us about how we can help them get their life back. If you’re suffering from credit calls, harassment, lawsuits, garnishment, if somebody’s foreclosing against your house or you think somebody is going to take your car back.

We have ways that we can help you. Please call us today. We offer a free consultation. Let us help you de-stress your life and get back on good financial footing.

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No upfront attorney fees in qualifying cases. Pay only court filing fee, credit reporting fee, and pre-bankruptcy credit counseling session fee to get a case on file to stop garnishments, repossessions, and certain court actions. Restrictions may apply. Please call to discuss your situation and learn how we can help.