Are you in danger of losing your home to foreclosure? It’s difficult to know where to begin and what possibilities are available. Why should you confront the unknown alone? COVID-19 has introduced a whole new set of issues and policies. Several changes have occurred as a result of COVID-19, including new legislative acts enacted across the United States and in the State of New York.
Strategies to immediately stop a foreclosure
During the COVID-19 national emergency, the President of the United States signed an Executive Order proclaiming a new policy of the country to reduce residential foreclosures. This empowered the Secretary of Housing and Urban Development to intervene and help homeowners avoid foreclosure as a result of the pandemic’s problems by giving assistance to prevent foreclosures.
Is It Possible to Stop a Foreclosure?
Is it possible to stop a foreclosure once it has begun? When you’re facing foreclosure, you need to know how to stop the process, and you need to know how to stop it at the last minute. There are a few things you can do right now to avoid foreclosure. Filing for bankruptcy, modifying your loan, selling your property, deed in lieu of foreclosure, and resuming a loan are all options. To establish which tactic is appropriate for you, you should speak with a Foreclosure Defense Lawyer.
Chapter 13 and Chapter 7 bankruptcy are the most common types of bankruptcy. There are several significant variations between Chapter 13 and Chapter 7 bankruptcy, particularly in terms of how your property is handled. There may also be dangers linked with these, which should be investigated.
For persons who earn too much money to qualify for Chapter 7, Chapter 13 bankruptcy is a restructuring bankruptcy. A debtor can keep all of their property if they settle all or part of their obligations through a repayment plan under Chapter 13. This implies that when you apply for Chapter 13, none of your assets are sold. The debtor’s income, debt, and spending are all factored into the repayment plan. This works well for debtors who have a steady income and enough money to pay off a portion of their debts each month.
A liquidation bankruptcy is a Chapter 7 bankruptcy. To file for Chapter 7, you must meet certain income standards. Most unsecured debts are discharged under Chapter 7 without the need to repay them. This means that if you file for Chapter 7 bankruptcy, the majority of your property will be liquidated to pay off your obligations. When a Chapter 7 petition is filed, an “automatic stay” is imposed, preventing creditors from collecting. For low-income debtors with few assets, this strategy works well.
The Consequences of Bankruptcy
Filing for bankruptcy comes with hazards, especially if it is not done correctly. Property loss is a significant risk of bankruptcy. The danger here is that you don’t want to be blindsided by a turnover request for a property you didn’t think you’d lose by filing bankruptcy. Denial of discharge is another risk, which arises when a crucial fact is ignored. This can happen even if there is only one material fact omitted. Another risk is failing to recognize that debt is non-dischargeable.
Although bankruptcy is not particularly dangerous if done correctly, it can be a challenging process to manage for someone who is unfamiliar with the subtleties of the industry. To avoid these dangers, you should seek the assistance of a foreclosure attorney.
Another option for avoiding foreclosure is to sell the house. The proceeds from the sale are then used for the repayment of all your debts, including any additional costs. Despite the fact that you will be selling your home, the downsides of a foreclosure can be avoided. The alternative possibilities, on the other hand, maybe more appealing to people attempting to figure out how to avoid foreclosure and keep their property.
People may try to sell their homes for more than they owe in order to prevent foreclosure. Once you’ve made the decision to sell, notify your lender that you intend to sell the property in order to pay off the mortgage. Lenders may agree to postpone the foreclosure sale or auction so you can find a buyer and sell the house. All of this may be contingent on the value of your home.
Short sales also avoid foreclosure. The home is sold for less than what you owe in a short sale. Lenders may consent to these since foreclosures have a number of drawbacks that lenders would prefer to avoid. Even if they don’t want to lose money, the time and money spent on the foreclosure process may make a short sale more appealing.
A deed in lieu of foreclosure is a legal instrument that transfers ownership of a property from the owner to the lender in exchange for the repayment of mortgage debt. This may be enough to prevent a foreclosure. It returns the property to the lender in exchange for relief of mortgage obligations. Both parties must be on the same page.
Advantages and Drawbacks
The biggest benefit is that you are no longer responsible for the debt. It enables you to halt the foreclosure process, so avoiding the negative consequences of a foreclosure. It can also help you avoid having a negative impact on your credit score. By doing a deed in lieu of foreclosure, you can avoid the expenses, time, and length of the foreclosure process. This method can help keep the situation more private by avoiding the public visibility of foreclosure once a notice of default is filed.
The biggest downside of this agreement is the loss of property that comes with it. You will most likely have to relocate because you will no longer own your home.
PS: This is not a legal advice, please seek a professional. This is for informational purposes only.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.