One method to fight a bank foreclosure is by answering a foreclosure complaint. In Kentucky, if a person fails to file any answer the bank will foreclose within 3-6 months and a person will normally be evicted following a default judgment. Filing an answer and discovery will often allow an individual to stay in the home for an extra 6 months to 2 years, sometime even longer. Filing an answer to the complaint is almost always your best option. Many homeowners are never told that this is an available option and they often simply move out of their home and starting paying rent elsewhere as soon as they’re informed that a foreclosure is pending. If you fail to file an answer to the foreclosure you may not receive notice of future proceedings or even be notified of the foreclosure sale. In extreme cases, debtors have come home to their possessions sitting on the sidewalk.
If counter-claims can be made, filing an answer to a foreclosure may allow the homeowner to stay in the home for a year or two while pursuing other options or finding another home. However, fighting the bank will increase attorney fees and bank charges. It can also deduct from your equity, but if there is no equity in the property and your eventual answer is a bankruptcy, fighting in court can be an effective method to stay in your home while you consider other options.
The Hamp and many other programs such as the Mortgage Forgiveness Debt Relief Act ended on 12-30-2012. If there was a deficiency it will be taken as a 1099 income for the amount of the deficiency, if you do not file bankruptcy prior to the sale. This can create a situation where you have to pay taxes on a home that has been foreclosed. It is essential to file a bankruptcy before the sale to avoid these deficiency and tax problems. Click on the following link for a timeline of the foreclosure process, which averaged 630 days nationally in 2012.