How Bankruptcy Can Help Save Your House

Who We Help

Here at Whitten & Whitten, we understand that every situation is different. No matter your needs, our team is here to listen to you and help you determine the best next steps forward. Here are situations we often assist with:  

• You fell behind after a hardship and feel confused by the paperwork. A job loss, illness, divorce, rising bills, or a death in the family pushed your mortgage out of reach. Now you have a notice of default, a demand letter, or other foreclosure documents, and you are not sure what any of it means. We help you understand what the papers say, how much time you may have, and which options are still open to you.
• A foreclosure case has been filed, or your home is scheduled for sale. Your lender may have started a court case, asked for a judgment, or set a sale date. Deadlines in these matters move fast, and missing one can cost you important rights. We help you respond to court papers, understand urgent timelines, and look at whether reinstatement or another defense may work in your favor.
• You are trying to make the mortgage manageable through loss mitigation. Maybe you have applied for a loan modification, repayment plan, or forbearance. Perhaps you already sent in documents, got conflicting instructions, or were told no. We help you sort out what happened, whether an appeal is possible, and what other paths may still be available.
• Your servicer made errors or kept pushing foreclosure while you sought help. Servicers sometimes lose documents, misapply payments, add fees no one can explain, or give contradictory answers. Some keep the foreclosure moving even while reviewing a relief application. We also look at whether the lender followed the required notices and procedures, and whether it holds the proper documentation and authority to foreclose at all.
• You may not keep the home but want to avoid the worst outcome. Sometimes staying is not realistic, and that is okay. If you are weighing a short sale, a deed in lieu of foreclosure, a negotiated payoff, or another exit, we help you understand any remaining debt, deficiency exposure, tax questions, and the rights that may still belong to you after a judgment or sale.

If you see yourself in any of these situations, reach out. The sooner we talk, the more choices you are likely to have.

Choosing Bankruptcy in Lieu of Foreclosure

You should consider filing for bankruptcy to protect your house from a foreclosure sale. When you file for Chapter 7 or Chapter 13 bankruptcy, the bankruptcy court will automatically issue a stay that prevents your creditors from pursuing their collection efforts against you, including preventing creditors from initiating a foreclosure sale on your home. However, your creditors could seek to have the stay lifted through a motion, which would expose your home to the foreclosure proceeding.

Chapter 13 Bankruptcy Repayment Plan Can Protect Your Home

If you file for Chapter 13 bankruptcy, you can protect your home from foreclosure, even if your creditors try to file a motion to lift the stay. Filing for Chapter 13 bankruptcy allows you to develop a repayment plan for your overdue mortgage payments. Under Chapter 13 bankruptcy, you will need to propose a repayment plan for your overdue mortgage payments over a period of time. You will be required to pay both your regular mortgage payments due each month and your repayment of the overdue payments until you have made up all of your overdue mortgage payments. By entering into a mortgage repayment plan through Chapter 13 bankruptcy, you will get to keep your home and not have to worry about your house being sold in a foreclosure sale unless you cannot make payments under your repayment plan.

Safeguarding Against Foreclosure on Secondary Mortgages

Chapter 13 bankruptcy can also be handy if you are worried about a second or third mortgage foreclosure. Chapter 13 bankruptcy can help you by eliminating some of the payments on your second or third mortgage. If your second or third mortgages are backed by the equity you have in your home, but your home has dropped in value, there might not be enough equity to secure your other mortgages. This means that your second or third mortgage can be converted into unsecured debts, which can be partially or fully discharged through Chapter 13 bankruptcy.