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HOW TO STOP THE SALE OF YOUR HOME
Every day I speak with home owners who had sufficient income to pay their home loan when they purchased it, but suffered a temporary interruption in income which prevented them from making some mortgage payments. Now, the bank has scheduled their home for a foreclosure auction, or a sheriff sale.
First, your SALE WILL BE STOPPED. In fact, we GUARANTEE it! We accomplish that by filing what is called a Chapter 13 Petition.
More than fifty percent of all Chapter 13 cases are filed with the primary intent of saving a home from foreclosure sale. You’ve probably heard commercials about Chapter 13, or seen billboards while driving to work, but how does Chapter 13 actually help you? Let’s make it easy to understand.
The Chapter 13 process is also called a “Cure and Maintain” plan. Each month (starting in 30 days after filing), you make two separate payments. 1) Cure payment; and 2) Maintain payment.
The Maintain payment is simple. Whenever your next mortgage payment is due, you make the payment directly to your mortgage lender. Don’t worry about them giving you a hard time; THEY WILL BE FORCED TO ACCEPT YOUR PAYMENT. Then each month after, you just “Maintain” making mortgage payments.
Next, we calculate how much you are behind on mortgage payments. The good news is that the law allows us up to sixty months to repay that debt in installments. For the next sixty months (or sooner if you are able to afford it), we will slowly “Cure” the default.
The bank will be forced to accept your payments each month, will not be allowed to foreclose on the home, and most importantly, your home remains yours!
Example:
Sam and Stephanie (a couple) earn combined take home pay of $3,000 per month. Sam works. Stephanie is in school and stays at home with their new born. They have a $1,500 monthly mortgage payment.
Unexpectedly, Sam is laid off from his job. The family goes without any income for the next 6 months. The lack of income forces the couple to stop making their mortgage payments as Sam tries to find a new source of income. Eventually, Sam finds a new job.
However, the mortgage company sends Sam and Stephanie a bill stating they need to pay $30,000 in past payments and outrageous attorney’s fees, or a foreclosure sale will occur the next month. Sam and Stephanie desperately try to work out a modification or repayment plan, but the mortgage company refuses to take partial payments or work with them at all. Even worse, they have nowhere to go if they lose their home.
They are in luck! Using Chapter 13, Sam and Stephanie will be able to force the mortgage lender to stop their foreclosure sale and start accepting payments.
Their attorney will help file a plan which permits them to pay the future mortgage payments of $1,500 per month, plus an extra $500 per month for 60 months to cure the $30,000 default the bank alleges. As part of this process, the mortgage company is prohibited from proceeding with a foreclosure sale or taking any further action to collect the debt outside of the bankruptcy process. Sam and Stephanie can breathe again. Their home remains theirs!