Experienced, Compassionate and Effective Advocacy

Some ways to avoid a foreclosure

On Behalf of | Apr 19, 2016 | Bankruptcy

In 2012, there were about 16 million homeowners facing foreclosure compared to just 6 million at the start of 2015 according to Zillow. However, as many as 20 percent of homes in cities such as Chicago or Las Vegas are underwater even as home values rise. This means that something as simple as a job loss or rising interest rates could trigger foreclosures for many Virginia families moving forward.

Those who are facing a foreclosure already or have concerns about making payments may want to talk to a homeownership counselor in their area. It may also be worthwhile to consult with an attorney about how to resolve a foreclosure already underway. The federal Making Home Affordable program may also be available for those who signed their mortgage loans before January 2009 and owe less than $729,250.

Prior to a foreclosure, a homeowner may want to work with the lender on refinancing options or decide to file for Chapter 13 bankruptcy. This may stop the foreclosure or postpone it until a judge can hear the case. Additionally, homeowners may have time under state law to contest a foreclosure proceeding. After that time has passed, it may still be possible to challenge the move and retain ownership of the home if the lender hasn’t followed proper procedure.

The use of Chapter 13 bankruptcy may make it possible to reorganize debt to pay off creditors over a period of from three to five years. In many cases, the plan that is approved by the court will contain provisions that allow a debtor to catch up on mortgage payments that are in arrears. A bankruptcy attorney can describe the eligibility requirements for this chapter.