Louisville Foreclosures Kentucky- Your Options Explained with a Video

If your lender serves you with a foreclosure complaint in Louisville, Kentucky, you only have 20 days to file an answer. If you don’t, a default judgment may be issued. A mortgage company often starts foreclosure on a single or multi-family home when you are about 60 to 90 days overdue. But they won’t file the foreclosure until it is 120 days in default.   There are many different ways to handle a foreclosure proceeding and get your home out of the Louisville foreclosure listings.  

Louisville Kentucky Foreclosures and Your Options

You must decide to save the home or allow it to go back using one of several methods.  The method you choose may allow you to avoid a 1099 tax liability or debt for the deficiency.  Some foreclosure defenses are more profitable to you than others. Some foreclosure defenses may involve suing the bank back or suing the debt collector back. The law firm for the bank or the lender rarely explains your best options or legal issues to you. They want to profit from you.  They don’t want you to profit from them.

If you wish to save the home, you have not just 3 or 4 options you have several. The major options are to file an answer to the foreclosure proceeding, attempt a mortgage modification, or submit a Chapter 13 bankruptcy and catch up on the payments. Even if you wish to sell the home, filing bankruptcy or an answer and discovery often gives you time to get the property listed and sell the property.   You may need time to find another home through agent listings in Louisville, Ky. Our law office does that too.  Homes in the Louisville foreclosure listings are offered to consumers first and then to investors.

Choosing a Foreclosure Attorney

foreclosureIf you want to let the home go back, you might need to delay the foreclosure proceeding to short sell the house or find another home. If you are searching to find a new home for single or multi-family, it would be good to look in the pre-foreclosures area where there is less competition from other buyers. Filing an answer or bankruptcy will typically give you the time you need to find other types of housing and avoid tax and deficiency problems.

Additionally, many of the solutions you are offered are scams from people who claim to be experts. A person just released from prison can claim to be an expert. Perhaps if they have been a licensed real estate broker for 20 years they have some experience and ethical standards.   But many of the people who will approach you have not earned the knowledge by doing thousands of cases. Many scam artists claim to be experts at having saved homes from foreclosure. These experts are often experts at stealing equity from homeowners who are in trouble. They often make promises to get a mortgage modification, but usually, they take your money or the equity in your home.  You often still find your home coming up for a sale in the Louisville foreclosure listings after paying them for help. Nothing cures a foreclosure better than catching up the payments with a Chapter 13 or doing something like a partial claim. modification or workout.

Stop Kentucky ForeclosuresForeclosures and Short Sales

Short sales are an alternative to foreclosure. With this alternative, you or your realtor are continuously working to sell the property listed for the mortgage company. However, it might take a long time to find buyers or to get it approved. Also, be aware that short homes for sale cannot be made if there are several liens like a second mortgage, judicial, or tax liens. The bank may not need more REO property, but it does not have to accept a short sale for your home. You might do a lot of work and still get refused by the servicer. Thankfully, there are local real estate agents which can help you set up real estate deals in Louisville, KY.  Often you just have to search for agents who specialize in short sales for Freddie Mac, HUD, and government foreclosures.

A short sale has a slightly smaller effect on your credit and getting a mortgage later. Notice I say a slightly lower impact on your credit. If you don’t pay the total debt on time, it always affects your credit. The short sales option is slightly less damaging than a bankruptcy by about 25 points. But, be aware that short sales can still give you a 1099 tax problem. Even real estate agents who continuously work pre-foreclosures cannot predict the price of the tax bill from a short sale.  The IRS requires each mortgage company to claim the tax loss and file 1099 in Louisville, ky. However, this may or may not cause an income tax problem. Also, the mortgage company may or may not forgive the deficiency; instead, they often require you to sign a new debt.

 Homeowner Foreclosure Scams

foreclosure scamBeware of strangers that offer to purchase your foreclosed homes. Unfortunately, the stranger who shows up at your door wanting to buy your home is often a foreclosure scam. This person often gets you to sign your deed to them and then evicts you or charges you rent while the home continues to be sold in foreclosure.   Or the person buys your home at a huge bargain. Often the best alternative is to call a reasonable bankruptcy attorney and stay in the home. As long as the deed is in your name, you generally have the right of possession in Louisville, ky.

Be wary of foreclosure and pre-foreclosures rescue companies who claim that they are helping you. They might even ask you to send them mortgage payments promising to make the payments for you or claim they can obtain a mortgage modification.   These companies cannot defend you in court or file documents in court unless they are a licensed attorney. Given these options, I assure you that a licensed foreclosure lawyer is far less expensive in Louisville, ky.

Foreclosure Auctions

foreclosure auctionAfter the auction takes place in Louisville, KY, you can no longer save your home by filing Chapter 13. After the sale, your only recourse is to redeem the property by repaying the purchaser what he paid for the property. He gets a small profit from selling it back to you through redemption. The person who wins the auction owns the foreclosed homes from the moment he wins the auction. A bankruptcy can not reverse a Kentucky foreclosure auction. The only option after a sale tends to be redemption.

You must file Chapter 13 or 7 before the auction sale, or the house belongs to a new owner after the auction in Louisville, ky. If an auction is ordered, a judgment has been entered, and have lost the lawsuit.  You only had a limited time to appeal a verdict and often that time has expired. After it is sent to the commissioner, the only option to stop the sale is bankruptcy or asking the mortgage company for mercy. Usually, the lender has no understanding and sends home to the commissioner for a sale.

Louisville Ky Foreclosures and Bankruptcy

Your best foreclosure defense option is often to keep the home and file a Chapter 13 to catch up the mortgage.  If you file Chapter 7, you can delay the sale in Kentucky for what is often at least 4-6 months. Chapter 7 only allows you to keep 28,900 in equity for each person on the deed.  The exemption increases over time and this is June 2022.   Chapter 13 will enable you to catch up on a mortgage. You only have to catch up on the mortgage to keep a home in Chapter 13. But in Chapter 13, you have to repay:

  1. Your best effort in repayment. If the creditor has to tighten his belt, you must tighten yours.
  2. What it takes to repay secured creditors get them up to date and repay priority creditors.
  3. What if Chapter 7 was repaid.

Both Bankruptcy chapters will stop a foreclosure temporarily. Chapter 13 allows you to keep the home by permanently catching up on the mortgage.

Bankruptcy Avoids the Tax Problems

Doing nothing means your home typically will be sold by the Jefferson County Commissioner.  A foreclosure sale will keep you from getting a mortgage for at least three years and up to 7 years for conventional mortgages. Bankruptcy has a smaller effect than the foreclosure proceeding on your ability to get a home.  Bankruptcy only keeps you from owning a home for two years. But bankruptcy also stops your foreclosure. You don’t find your home in the foreclosure listings after you catch up on the mortgage in Chapter 13.   And you can take up to five years to catch it up.  On the other hand, bankruptcy avoids the tax problems which a short sale or surrendering a home does not prevent.

 Surrendering the Home Might Leave you Liable

Homeowners who walk away from foreclosed homes are still liable for building code violations and sewer costs in Louisville, ky. Until the house is out of your name, you remain responsible for property taxes, lawsuits for injuries on the property, and building code citations. There are ways for homeowners to surrender foreclosure property that avoids tax and deficiency liability. Use a Louisville Foreclosure Defense law firm that helps you plan it so you don’t have a tax liability or a deficiency debt.

Stuck with a Louisville Ky Foreclosure? You Must Seek a Guidance from an Experienced Attorney

I understand how tough it is to handle foreclosure. Therefore, I am here to assist you with my experience of over 33 years and to give you instant access to solutions. I only take 20 cases a month and handle every case by myself. At my firm in Louisville, Ky, you will not be transferred to the paralegal secretary or junior attorney; you will speak to me and get reliable services. Give me a call, and you will be given an appointment. 

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Do you find yourself facing foreclosure? Don’t delay because timing is crucial. I am here to help you. So, contact my office immediately to start the conversation—Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.

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