Louisville Kentucky Foreclosure Defenses
For a bank, foreclosure is a business decision. While the foreclosure is going on, the mortgage company will only give you information which is in their best interest. The homeowner should make this a business decision too.
If you face foreclosure in Kentucky, you have two basic options. Delay the mortgage foreclosure by defending the foreclosure in state court or file for bankruptcy. Defending the foreclosure gives you time to modify the mortgage, catch up the payments, sell a home, or live in the home rent free for a time.
What is a foreclosure defense?
When you are served with a foreclosure, you can defend against the lawsuit by filing an answer with counterclaims and legal defenses. If the mortgage company has violated the mortgage lending and foreclosure laws, you can counterclaim and sue the bank back. Filing an answer and discovery will force the bank to properly foreclose on the property instead of taking short cuts. If you are unfamiliar with the law, it is difficult to find the violations and understand what the remedies are. Sometimes the company suing you may not even have the right to foreclose. You have rights that protect you from improper foreclosures.
Defending the foreclosure and bankruptcy are tools that will either cure or at least delay the foreclosure. These tools allow you enough time to find a new home without paying for a huge deficiency or tax debt. Defending the foreclosure in state court will give you time to sell the home or and pursue other options such as obtaining a mortgage modification. There are other options such as a cash for keys option, but you must file an answer and discovery to extend the time and pursue your options.
Foreclosures and Chapter 13
If you have enough income to pay for the home and catch up the mortgage over the next three to five years, a Chapter 13 may be the answer. Basically, you place the arrearage into the plan and repay it over 36 to 60 months. With this, you may treat the second mortgage as if it were an unsecured debt and eliminate it, if the the second mortgage has no equity.
Along with this, other debts such as auto loans can have their interest rates and payment amounts reduced. Unsecured debts may be repaid for less than 10%. Filing a bankruptcy before a foreclosure eliminates any debt for income taxes or deficiency from a foreclosure. It can be an important part of avoiding some problems and fallout from a foreclosure. Download our Bankruptcy Manual to make sure you understand the issues and what to do if you are involved in a foreclosure.
Filing the Defense
Filing a defense to foreclosure may allow you to remain in your home for a time. You may settle, short sale or modify a mortgage and lower the interest rate by defending the foreclosure or filing a Chapter 13. Obtaining a loan modification or short sale takes a lot of time and work. These options have problems and may not be an option. The longer it takes, the more you tall behind. The lender has to be willing to work with you.
It is always best to sit down and talk to an attorney that only practices in this area. You need someone who will spend time on your case. As a bankruptcy/foreclosure attorney, I take on less than 200 cases a year. I have over 30 years of experience. Instead of being a large office that just hands you over to a secretary or paralegal, I give you individual attention. Give us a call.