Options With or Without Bankruptcy
Metro-Detroit pundits continue to tout the economic turnaround. However, according to a USA Today report, Michigan homeowners were among the most likely in the country to be entering the foreclosure process as of August 2013. We understand this problem is not going away and many hardworking families could potentially lose their home. And, to make matters worse, families may still be left owing a large amount of money as a deficiency balance after their home is foreclosed.
Detroit Lawyers have the knowledge and tools to help solve a number of home foreclosure issues. Our office can help stop Michigan foreclosures, delay foreclosures, strip second mortgages, wipe out a mortgage deficiency and allow you to catch up on mortgage payments. We can also help save homes via mortgage modifications. Contact Detroit Lawyers at 248.237.7979 today to find out the options you have!
There are a number of options provided to homeowners facing foreclosure. If you are at risk of foreclosure, a qualified Michigan bankruptcy attorney can discuss which option is best for you.
Chapter 13 Bankruptcy – Stop Foreclosure and Keep Your Home
A Chapter 13 bankruptcy will allow you to stop a pending Michigan foreclosure and catch up on your overdue mortgage payments or property taxes. Once a Chapter 13 bankruptcy is filed, an automatic stay goes into place. The automatic stay is a court order that prohibits creditors from taking further action against you and the property you own, including your house. Thus, once a Chapter 13 bankruptcy is filed, the mortgage company can no longer proceed with the foreclosure of your home.
Chapter 13 bankruptcy also provides you with an opportunity to catch up on your past due mortgage payments through a payment plan. Your payment plan consists of your current monthly mortgage payment plus some portion of the arrears (past due payments). This will be a fixed amount which the mortgage company will be forced to accept under bankruptcy law.
If you have a second mortgage on your home, a Chapter 13 bankruptcy may allow you to strip the second mortgage. This is known as a Lien Strip and requires an Adversary Proceeding to be filed with the bankruptcy court.
Chapter 7 Bankruptcy – Walk Away from your Home
A Chapter 7 bankruptcy may allow you to walk away from your home without the worry of financial repercussions. When you purchase a home, you sign a mortgage and a note. The note is a promise to pay a sum of money to the mortgage company. The mortgage gives the mortgage company the right to take the property if the note is not paid on time. A Chapter 7 bankruptcy in Michigan will eliminate your liability as to the note. Therefore, you will not be legally liable for a mortgage deficiency, if there is one.
Bankruptcy Alternatives – Debt Settlement and Mortgage Modification
Debt Settlement is an alternative to bankruptcy. If your home was already foreclosed and there is a mortgage deficiency then debt settlement may be an option for you. However, there are a number of risks associated with debt settlement that should be considered.
Mortgage Modification is another option to save a home in foreclosure. Mortgage modifications provide homeowners facing a financial hardship a restructured payment schedule through the mortgage company . The downside is that modifications are complicated and it can take significant time to get a response from the mortgage company as banks and lenders are notoriously slow. Lastly, a mortgage modification may not stop a foreclosure.
Contact Detroit Lawyers at 248.237.7979 to schedule a free consultation. A qualified Michigan bankruptcy attorney will be happy to answer your questions regarding foreclosure and develop a plan to reach your goals.