By Robert J. Semrad | Published July 20 2021 |
What Does Pre-Foreclosure Mean
If you’re one of the millions of hardworking American families who have fallen behind on their mortgage payments, it's possible that your house is already in pre-foreclosure. If you find yourself struggling with debts that threaten to overwhelm you, then bankruptcy may be the right option for you.
At DebtStoppers, we understand just how impossible this situation can feel, and just how easy it can be to get behind. Our accomplished legal team can help you avoid losing your home by filing for Chapter 7 or Chapter 13 bankruptcy.
What Does It Mean When a House Is in Pre-Foreclosure?
Pre-foreclosure is the initial stage of the foreclosure process, which is intended to allow homeowners to pursue opportunities to stay in their houses. It usually begins when you start to miss payments on your mortgage.
Under the terms of a home loan, you borrow the full purchase price of the property and agree to pay it back to the lender in monthly installments. If you miss any of these payments, you are violating the terms of your mortgage, and if you miss three monthly payments, your loan will go into default.
Once you fall three to six months behind on your mortgage, most lenders will send you a legal document called a notice of default to report that legal action will be pursued if you don’t catch up on your payments. This notice is considered to be the beginning of the pre-foreclosure process.
Steps To Follow To Protect Your Home
If your home is already in pre-foreclosure, a DebtStoppers lawyer can help you protect your house by filing for Chapter 13 bankruptcy. As soon as you file a bankruptcy petition, the court will grant you an automatic stay. The stay prohibits your creditors from pursuing collection activities against you, meaning that lenders will be forbidden from initiating new proceedings or continuing to pursue cases that have already been filed. If you’re in pre-foreclosure, a bank cannot move forward while the stay is in place.
On top of the temporary assurance provided by the automatic stay, filing for Chapter 13 can help you save your house by restructuring your debts. Through this process, you can reduce and reorganize your debts into a 3-to-5-year repayment plan that allows you to keep your home. Our clients generally end up only paying about 10% of their unsecured debt when they file Chapter 13.
Why Do You Need Help From Lawyers in Your State?
Even though bankruptcy law is created on the federal level, it’s vitally important that you get help from lawyers in your state when your home is in pre-foreclosure, as the process is regulated by state law. Each state interprets the law in a different way, and courts often have specific procedural requirements that only experienced local practitioners will know.
The knowledgeable lawyers at DebtStoppers work in offices across the country, and each member of our team has a deep understanding of the laws in their state and years of bankruptcy experience in the jurisdictions where they practice. We can answer all your questions and explain how bankruptcy can help save your home (and even improve your credit!) Call an office in your state today or contact us online to request a free initial consultation.