In Louisville Kentucky, the foreclosure process can move very quickly without an effective foreclosure defense. Properties can be sold within as little as 90 days. The bank has an attorney often being paid hundreds of dollars an hour which is being added to your mortgage balance. That attorney often has years of legal training and experience you don’t have. This attorney is paid to give advise to the bank not you. He is not your friend. The bank is looking to maximize the profit from the mortgage or foreclosure. They are not being paid to benefit you. You should take a moment to make a financial decision and ask your self “Is it more profitable to keep the home… or to let it go back”. If it is better to keep it then consider a mortgage modification and/or a Chapter 13.
Chapter 13 and Modifications avoid Louisville Kentucky Foreclosures
If the home sells in foreclosure, FHA VA and other programs will prevent you from having another mortgage for 3-7 years. You aren’t defenseless. You have legal defenses you can take to slow the process. Slowing the process can give you more time to find other solutions. But you have to make the right decisions early or you lose rights and agree to the sale. We help by sitting down with you and finding a strategy. If you want to save the home you can catch up the mortgage in a Chapter 13. But if you wait, the foreclosure expenses mount up and may cut off your ability to save the home. By failing to take some defenses or actions you waive your rights to them permanently. By waiting too long, a Chapter 13 becomes more expensive to the point you can’t afford a Chapter 13. Modifications also cure the foreclosure but the success ratios are low unless you sue the mortgage company back or file a bankruptcy.
Kentucky Foreclosure Defenses
It’s our job to point out the mistakes the lender made during the foreclosure process. There are procedures the lender has to go through closing the loan, processing the mortgage, filing the mortgage, in the pre foreclosure process and during the foreclosure.
- Mortgage servicers and holders must give you a fair chance to correct the loan default
- Plaintiffs must prosecute the foreclosure in the name of the real lender or holder
- Mortgage servicers and holders must introduce the original documents in the foreclosure proceeding
There are at least 64 different defenses that may be available to avoid a foreclosure. You have a right to insist the lender properly present the evidence in court and follow the proper foreclosure procedures. This will slow down a foreclosure. The mortgage lender may even be forced to dismiss their case and start completely over. The additional time may allow you to catch up before the foreclosure can continue. This time may allow you the time to find another home, obtain a mortgage modification, forbearance, or sell the property. In may be necessary to file a bankruptcy to avoid the tax liability, deficiency judgment and filing a bankruptcy will also delay the foreclosure.
A Chapter 7 or 13 Bankruptcy stay avoids Foreclosures
At the start of a Chapter 7 or Chapter 13 a temporary court order called a stay goes into effect that prevents collections and seizure of your property. If you properly complete the bankruptcy normally you get a permanent court order called the discharge. The discharge order permanently protects you. Filing a bankruptcy automatically stops a Louisville Kentucky foreclosure unless you are filing a second Chapter 13. Even if you are filing a second case within a year you can ask for an extension of the stay for good reasons. Every answer, discovery or bankruptcy that is filed normally delays the foreclosure at least 6 months.
The lifecycle of the foreclosure process timeline:
- Bank files a Foreclosure complaint and within 20 days the Debtor must an answer or a default is entered. Just filing the answer will normally mean that the foreclosure should take about 6 months. A proper answer will require the Lender to respond to defenses and counter claims in your answer.
- Within 30-45 days after the Debtor files answer the homeowner should file discovery. By filing a proper discovery the lender will be forced to take time to respond to the requests. This will normally add about 6 more months to the process.
- Prior to the sale if a Defendant homeowner files a bankruptcy the process will take an additional 6 months or longer. If a couple owns the home a bankruptcy may be filed in the husbands name and a second bankruptcy can be filed in the wife’s name later when the home again comes up for sale. A Chapter 13 will delay the sale much longer if payments are made in the plan and may eventually cure the foreclosure.
Motions to terminate the stay
In a Chapter 7 or 13 the Mortgage company can ask the stay be set aside. But obtaining that permission will take over 30 days and it is expensive. Often the lender will wait until after the Chapter 7 bankruptcy has been discharged. This insures a Chapter 7 will delay a sale 6 months.
If payments are not made in the Chapter 13 plan the mortgage company will file that motion to terminate the stay. To remain in bankruptcy the debtor will have to catch up these payments plus pay the attorney fees for the bank and filing fees. This will often cost over 1000 dollars. Always make the mortgage payments on time if you are in a Chapter 13.
A Chapter 13 allows you to catch up the mortgage and permanently save the home. You can take up to 5 years to catch the mortgage up but the earlier you choose this option the cheaper it is and more likely it is that it can save the home. Most people plan a creative combination of these. The earlier you start with me, the more I will be able to help. Call me for a free consultation at 502-625-0905.