Saving your house from foreclosure

Although we are a long way from the foreclosure crisis of 2006, experts predict that 2015 will represent a large spike in foreclosures forcing many families out of their homes.  This is due primarily many of the temporary relief measures during the crisis coming to an end.

The government programs, such as HAMP, that reduced interest rates will reset in 2015 resulting in higher mortgage payments.  In addition, many of the home equity line of credits that borrowers took out to get through the bubble years will have increased payments in 2015.

Stop Foreclosure and Save Your House

On top of increased mortgage payments, many families that we talk to face reduced hours and increased expenses.  These changes inevitably result in families falling behind on their mortgage payments. Soon, one past due payment turns into two, two past due payments turns into three …until the arrearage becomes albatross that cannot be overcome. Eventually mortgage companies attempt to foreclose on the property and take the home.

Families that experience this can often feel helpless and without the power or tools to keep their home. Fortunately, after speaking to an experienced bankruptcy attorney, families can regain the power and save their home on an easy court ordered payment plan based on their income.

Filing Chapter 13 Bankruptcy to Stop Foreclosure

As soon as a Chapter 13 bankruptcy is filed, the foreclosure proceedings are immediately stopped. At this point, a plan will be submitted to the court featuring the monthly mortgage payment and the arrearages paid out over a three or five year plan. The plan takes approximately three months to be confirmed.

Most families choose to have their payment taken out of their paycheck. Therefore, they no longer are burdened by sending out the monthly mortgage payment and arrearages.  A Chapter 13 filing can also take care of past due income tax debt and discharge other unsecured debt.

Stop Foreclosure for Past Due Property Taxes

A Chapter 13 filing can also stop foreclosure based upon past due property taxes. Pursuant to Michigan law, a county cannot foreclosure until the property taxes become past due for three years. For example, 2012 past due taxes cannot be foreclosed upon until April 1, 2014.

It is important to file a Chapter 13 bankruptcy before the property is foreclosed. In a Chapter 13 plan, the property taxes are treated differently based upon how long ago they were billed by the city. Delinquent property taxes, or those that are one year old, will be treated in the plan at 12% interest.

Forfeited property taxes, or those that are two years old or longer, will be treated in the plan at 18% interest. Paying the property taxes down over five years in a Chapter 13 plan, even at these high interest rates, are often much better deals than any payment plan the county treasurer can offer.

Save your home now

Oftentimes, families facing foreclosure will contact our office when it’s too late and the property has already been foreclosed. Even though they did not believe the received proper notice and were unaware of the proceedings, it is very difficult to save a property once it has already been foreclosed and title has passed to another party. Even if you are unsure if you are facing foreclosure, contact Detroit Lawyers today at (248) 237-7979 so an attorney can review your situation and keep you in your home.