Jan 24, 2023 •

Foreclosure Defense and Bankruptcy

Oh, no!  The event that you have been dreading has finally happened.  Each month you have found yourself falling further and further behind on your mortgage payments, and now you are facing foreclosure on your home.

Like most of us, you find that you are willing to do just about anything to keep your home.  A Google search for a “foreclosure defense attorney” has yielded several pages of results for these types of lawyers – all of them promising to give you the best chance of stopping a foreclosure sale on your property.  But can they REALLY make good on their promises?

Why Filing Bankruptcy is the Best Method to Stop Foreclosure Sales

There are several different methods that can be used to stop a foreclosure sale, at least temporarily, and these attorneys will gladly accept your hard-earned money to do any or all of them.

A few of the most commons methods used are:

  • Loan Modifications
  • Analyzing your home’s Chain of Title for defects; proper signatures and assignments, etc.
  • Reviewing the lending and payment terms of your present mortgage to discover any violation(s) of your protections under the Truth in Lending Act (TILA), also known Regulation Z.

All of the above CAN result in the termination of a foreclosure process, but in most cases these methods ultimately fail to provide lasting results.  Oftentimes, the homeowner discovers, only the day before the foreclosure sale is to take place, that their strategy did not work.  By the way, it could cost you as much as $5,000 to $10,000 to find out if you are one of the lucky few.

In recent years, mortgage lenders have begun to push back against many of these lawsuits, which in many cases were simply little more than extortion attempts.  This push back not only contributes to the driving up of the costs to you, but it also lessens the likelihood of your success.  In most instances, the mortgage lenders’ pockets are deeper and better lined for a lawsuit than are yours.

Loan modifications are really the best option for success, but they take a long time to process, and if you are ultimately denied, you will most likely not have time to do anything else before the foreclosure sale takes place.

However, the filing of a Chapter 13 bankruptcy will stop the foreclosure sale of your home and will still allow you to pursue the above remedies, if you should so desire.

Explore Your Bankruptcy Options First

Here’s a suggestion that may seem outrageous to many:

Before you hand over thousands of dollars to a “foreclosure defense” attorney or slog through the lengthy loan modification process to only find that you have been denied the day before the foreclosure sale is to take place, schedule a consultation with a bankruptcy attorney and learn about your options.

The immediate benefits of a Chapter 13 bankruptcy include, but are not limited to:

  • Filing bankruptcy immediately stops any foreclosure sale.
  • It provides you with the opportunity to catch up on your past due payments over up to 60 months and take your loan out of default.
  • It also allows you to eliminate any unsecured debts such as credit cards and medical bills, often with the same monthly payment used for your mortgage “catch-up” payments.
  • It enables you to pursue a loan modification or explore any litigation you might have against a mortgage lender all while keeping the protection of the bankruptcy stay and preventing the lender from foreclosing. It has even been found that lenders are more receptive to approving a previously denied loan modification while the property is in a Chapter 13.
  • In some cases, it is possible to remove liens against properties which are completely “under water” or have no equity.
  • It provides peace of mind – meaning as long as you make the required payments, you are guaranteed to bring your loan current and eliminate other debts.

Not everyone is eligible for a Chapter 13 case.  For example, you must have less than $419,275 in unsecured debts and $1,257,850 in secured debts, which includes home mortgages and car loans.  But having a consultation with an experienced bankruptcy attorney should be your first step, not the last, when deciding on the best way to tackle foreclosure problems.

At The Alliance Legal Group, PLLC, we believe that no one should have the ability to take away YOUR home.  This belief is the driving force of why we have helped thousands of Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Newport News and Hampton homeowners file a Chapter 13 bankruptcy to stop their mortgage lenders from foreclosing on them.

Call us today at (757) 482-5705 to schedule a FREE bankruptcy consultation with an experienced Alliance Legal Group attorney.

Let us show you how the bankruptcy laws could save your home.


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