The best way to prevent foreclosure on your home is to make your mortgage payment every month. The premise is simple and straightforward, but actually having enough money in your account every month to make the payment is a whole different story.
Rising Costs
Many people are constantly struggling to pay their bills. With a mortgage payment sometimes exceeding $2,000 a month, this is likely the biggest bill in the household. With the economy going up and down, prices are rising, and salaries are not keeping pace. In fact, many people have been laid off in the past few years. Many still have their jobs but are forced to return to the office, causing them to incur extra expenses such as gas, food, and daycare.
What Happens if I’m Behind on Payments?
When a homeowner is several months behind on payments, it could trigger the foreclosure process. A foreclosure means the lender takes ownership of the home and sells it to recoup the money owed.
To prevent this from happening, you could sell the home. Barring this, you could discuss your situation with the lender and see if they can help. If not, then bankruptcy could help delay the foreclosure and in Chapter 13, you may be able to keep your home.
How can I prevent foreclosure in Maryland?
Bankruptcy can be a tool to help you keep your house, as it delays the process. Essentially, you are given more time to save up and make payments.
The Automatic Stay
Once you file for bankruptcy, the court automatically issues an Order for Relief, which grants you an “automatic stay.” This directs your creditors to immediately cease their collection attempts, no matter how far along in the process you are. Even if a foreclosure sale has been scheduled for your home, it will need to be postponed. Under the law, all collection and foreclosure action must cease until the bankruptcy is finalized. This only takes three to four months, though, so you do not have a lot of time.
Using Bankruptcy to Prevent Foreclosure
Keep in mind that bankruptcy is not a cure-all. If you choose Chapter 7 bankruptcy, it will forgive your debt, and that is it. It will not lift the lien. Since you did not pay off the mortgage, the foreclosure will stay on your home. This means you can still lose it.
Chapter 13, on the other hand, allows you to pause action on that lien. If you can catch up on your payments, you may be able to save your home. Use the Chapter 13 repayment plan to reorganize your debts and give yourself more money toward the mortgage.
Don’t Delay with Foreclosures
When you are behind on mortgage payments and your lender is refusing to work with you, filing for bankruptcy may be able to help you keep your home. However, bankruptcy is a major step and should be done only as a last resort. It is critical to contact us as soon as possible to help intervene and plan your alternatives. Count on the Law Offices of Adam M. Freiman to oversee all aspects of your case and see how bankruptcy can help you. Fill out the online form or call (410) 486-3500 to schedule a consultation.
