The best strategy for keeping your home is getting and keeping your house payments up-to-date. If you don’t have enough money to pay everyone you owe, always pay your mortgage payment first. It is your number one priority, and you should never allow payments on other debts to cause you to miss or get behind on your house payments.
Even if you have already missed one or more monthly mortgage payments because you are trying to pay all of your other creditors, bankruptcy can help in either of two ways:
- Chapter 13: If you are so far behind that it is impossible to catch up your payments, Chapter 13 will allow you to keep you home by making the monthly payment, plus an extra amount each month to catch back up. You can have up to five years to catch up your payments.
For example, if your mortgage payment is $1,000/month and you are six months ($6,000) behind you could pay $1,100/month to bring your home loan current over five years.
- Chapter 7: If you focus your income on keeping or bringing your mortgage payments up-to-date, you may find that Chapter 7 is the key to keeping your home by wiping out your other debt and freeing up your income up to pay your house payment.
What Happens During the Foreclosure Process?
If you are involved or are worried that you may soon be involved in a foreclosure proceeding, you should seek legal advice without delay. Foreclosing on a home does not involve a lengthy procedure in Tennessee because it is the type of process known as non-judicial foreclosure, which does not require the lender to file any sort of court action. The lender must simply follow certain required steps such as providing you notice and advertising the sale three times in a local newspaper. If you are behind on your house payments, always open, read and keep the letters and notices you get. Don’t ignore them and stick your head in the sand. If you know where you are in the process you will have time to take the right steps to keep your home.
When you file either Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect, which immediately halts the actions of creditors. From the moment creditors are notified of the stay, they are not permitted to take any action outside of the bankruptcy proceeding to collect on the debt. This applies even to those lenders who have debt secured by your home. If your home is scheduled to be sold at a foreclosure sale, it is very important to stop that sale before it goes through. There is little or nothing you can do after your home has been sold at the foreclosure sale. The automatic stay can stop the foreclosure process in its tracks before it is too late to take the steps needed to keep your home.
Guidance from a bankruptcy lawyer can help you decide whether filing for bankruptcy should be a part of your strategy to stop foreclosure and keep your home.
Set up your free consultation today by calling my office at 865-470-4250 or contacting me online