Bankruptcy stops foreclosures, with certainty.
It’s the surefire defense to a scheduled foreclosure sale.
Then why do homeowners keep waiting til the day before the sale to find a bankruptcy lawyer?
Most of the other ways to stop a foreclosure sale require either gobs of money or an agreement with the existing lender or a new lender to dig you out of the hole.
And you don’t control either the other party’s decision making nor the timeline on which decisions are made.
So, two homeowners called my office last week, with foreclosure sales scheduled within a day or two.
One expected a modification of the troubled loan.
The other expected a refinance.
Neither came through and they were both shopping for bankruptcy lawyers at the 11th hour.
Last minute foreclosure defense
Filing bankruptcy, even a skeleton filing (the bare bones of the needed papers) takes time. If you don’t do the credit counseling briefing before you file bankruptcy, your case can be thrown out of court.
How do you choose the right chapter?
But more important than the necessary papers, you’re going to need the help of an experienced bankruptcy lawyer to figure out what happens next.
The automatic stay, the injunction that comes automatically when you file bankruptcy, just stops everything related to your debts, including foreclosures.
But, then what?
What next step is going to save your house? That’s where your bankruptcy lawyer comes in.
- Do you qualify for Chapter 13?
- Can you cure the default over time?
- Is a third party sale the best available options?
Last lawyer on the bench
If you wait til the last minute to find a lawyer to file your bankruptcy case, you’ve limited your options.
Only a lawyer who has nothing else meaningful to do this afternoon is available to take your case on short notice.
Do you really want the fate of your home to lie in the hands of a random lawyer whose most appealing quality is that he’s got time on his hands?
The better the bankruptcy lawyer, the more likely they’ve got other cases to work on and may not be willing/able to drop everything to save your house.
Line up help ahead of time
If you are pursuing non bankruptcy solutions to your foreclosure problem, shop for a bankruptcy lawyer at the same time.
Interview possible candidates and know what your lawyer will need to file a case for you. Understand your options and the implications on other parts of your financial life while you have time.
If everything works out as you hope, you won’t need to file bankruptcy to stop the foreclosure. But if you hit roadblocks, you’ve staffed your team of helpers with a lawyer, and you can move smoothly to Plan B.