If you face a foreclosure in Kentucky you have two options. You may delay the mortgage foreclosure by defending the foreclosure in state court or file for bankruptcy. Defending the foreclosure may give you enough time to modify the mortgage, catch up the payments, sell a home, or take other action.
What is a foreclosure defense?
In Kentucky when you are served with a foreclosure, you can defend against the lawsuit by filing an answer with counter claims and legal defenses. If the mortgage company has violated the mortgage lending and foreclosure laws, you can counter claim and sue the bank back. Filing and answer and discovery will force the bank to properly foreclose on the property instead of using short cuts. If you are unfamiliar with the law it is difficult to find the violations and understand that the remedies are. Sometimes the company suing you may not even have the right to foreclose and 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 to allow you enough time to find a new home without having to pay for a huge deficency or tax debt..
Foreclosures and Chapter 13
If you have enough income to pay for the home and catch up the mortgage over the next 3 – 5 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 a second mortgage as if it were an unsecured debt and eliminate it if there is no equity for the second mortgage to attach to. Along with this other debts such as the interest rates and payment amount of a car may be reduced. Unsecured debts may be repaid for less than 10%. By filing a bankruptcy prior to a foreclosure eliminates any debt for income taxes or the deficency for 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.
While filing a defense to a foreclosure may allow you to remain in your home for a time. You may settle the foreclosure, short sale the home or be able to lower the interest rate with a loan modification. However obtaining a loan modification or short sale may take a lot of work and these options have other problems or just may not be an option. It is always best to sit down and talk to an attorney that only practices in this area who will spend time on your case. This is as a bankruptcy/foreclosure attorney I take on less than 200 cases a year. Instead of being a large office that just hands you over to a secretary or paralegal to file I give you individual attention and I have now spent over 25 years doing this.