The thought of losing your home to foreclosure is unthinkable. Unfortunately, if you fall seriously behind on your mortgage payments, your loan servicer will likely take steps to foreclose.
Foreclosure does not have to be a foregone conclusion. Our Oklahoma City foreclosure defense lawyer can help you leverage bankruptcy to save your home. Filing for bankruptcy can stop a pending foreclosure and give you the tools, time, and flexibility you need to reorganize your finances and bring your mortgage current. Alexander Hilton & Associates can serve as your guide and advocate throughout each step of the bankruptcy process, providing you with the personal attention you need.
If you believe you cannot catch up on missed mortgage payments and wish to protect your home, reach out to our firm today. Schedule a free initial consultation by contacting us online or calling (405) 725-1441.
How Bankruptcy Stops Foreclosure
Filing for Chapter 7 or Chapter 13 bankruptcy can temporarily stop a pending foreclosure thanks to the automatic stay, a court order that halts all collection actions. Though Chapter 7 bankruptcy does allow you to protect a certain amount of equity in your home, you will not necessarily be able to keep it once the process has concluded.
If you wish to keep your home, you will most likely need to file for Chapter 13 bankruptcy. The process involves committing to a repayment plan that reorganizes your debt, including your mortgage arrears. You will be required to bring your mortgage current over the course of the plan, which can last between three and five years. This is accomplished through the paying of monthly installments, the amounts of which are tied to what you can currently afford.
The automatic stay will continue to protect you from foreclosure over the life of your plan so long as you continue to make your monthly payments. Once you complete your plan, your mortgage should be brought current. You will also be able to discharge any remaining unsecured debts, including credit card debt, medical debt, and personal loans. This can help you redirect financial resources toward your mortgage going forward.
Chapter 13 bankruptcy can also be extremely advantageous if you have multiple mortgages on your home. If the current fair market value of your primary residence is below what you owe on your first mortgage, you can eliminate any junior liens once you complete your repayment plan.
Our Oklahoma City foreclosure defense lawyer can help you prepare a Chapter 13 reorganization plan that works to cure your mortgage arrears and protect your home. Our team understands the intricacies of the bankruptcy process and is ready to help you make the most of your filing.
Only you can take the first step to save your home. Explore your options with Alexander Hilton & Associates by contacting us online or calling (405) 725-1441.
How Foreclosure Works in Oklahoma
When you miss a mortgage payment you will enter what is called a “preforeclosure” period. Missing a single payment is not the end of the world and will not trigger foreclosure proceedings. In fact, many loan servicers offer a grace period, especially if you have not missed a payment before. Eventually, however, a loan servicer will begin to assess late fees, inspection fees, and other penalties in accordance with the terms of your mortgage agreement.
If the real estate property involved is your primary residence, your loan servicer must contact you by phone within 36 days of missing your first payment to inform you of loss mitigation options. They must continue to contact you within each subsequent period of 36 days. Your lender must also provide you written notice of your loss mitigation options within 45 days of falling behind. Depending on your financial circumstances, it may be worth considering these loss mitigation options, which can include loan modifications or a mortgage forbearance.
Your lender cannot initiate foreclosure proceedings until you have fallen behind on mortgage payments for at least 120 days. This gives you ample time to consider and pursue all available solutions, including curing the mortgage, if possible.
If your servicer intends to foreclose your primary residence, they are required to provide you with a 90-day written notice before they can proceed. Keep an eye out for this notice: If your lender fails to provide you with it, you may be able to stop the foreclosure action.
The state of Oklahoma uses judicial foreclosures, meaning your lender will next file a lawsuit and take you to court. You will receive a formal summons and complaint. If the summons is served in person, you will typically have twenty days to respond. If the summons is received via mail or any other means, you will have thirty days to respond. If you receive a summons and foresee having no means of bringing the mortgage current, now is the time to contact our Oklahoma City foreclosure defense attorney.
If you do not respond to the lawsuit, your lender will request (and most likely receive) a default judgment that allows them to continue with the foreclosure. If you do respond, the case will be litigated, and you will need to mount a defense. This may be a practical option if your lender failed to provide you with proper notice, but in many cases, it does not make sense to litigate. Your lender will almost certainly receive a summary judgment if everyone agrees you are behind on your mortgage.
After the court issues a foreclosure judgment, a public auction will be scheduled and advertised. The lender will typically bid on the property themselves. If a third party wins the auction and the proceeds exceed what you owe, you are entitled to the profit.
Should the lender bid less than what you owe on the property, however, you become vulnerable to a deficiency judgment, meaning you will still owe the difference to your lender on top of losing your home. In other words, even if you are willing to lose your home, you should avoid foreclosure at all costs.