Committed to Saving Your Home in Mission Valley and Throughout Southern California
Losing your home to a foreclosure sale is a terrifying prospect, and it can be easy to feel helpless if you do not currently have the means to bring your mortgage current. No matter how dire your circumstances may seem, foreclosure avoidance options are often available.
As a San Diego foreclosure lawyer, I can work to save your home through bankruptcy. Filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy can stop an imminent foreclosure sale and provide you with the time and resources you need to raise funds and reorganize your finances. I have over 40 years of legal experience representing clients throughout Southern California and am ready to help you leverage numerous home retention strategies.
Your lender cannot foreclose your home unless you have fallen seriously behind on mortgage payments. Even then, the California foreclosure process can often exceed 200 days in duration, giving you ample time to pursue foreclosure avoidance strategies.
The clock will start ticking as soon as you miss your first mortgage payment. While your lender may be able to issue a late fee or penalty, they cannot foreclose based on a single late or missed payment.
Your lender can generally initiate the foreclosure process once 120 days have passed from the date of your initial missed payment. At this point, you may receive a “Notice of Default.” This document should provide instructions for how to bring your mortgage current. If you are not able to do this, you should speak to a qualified legal professional about your options, as foreclosure may be imminent.
You will have an additional 3 months from the date you receive your Notice of Default before your lender can proceed with a foreclosure sale. The foreclosure will not proceed if you are able to catch up on missed payments and any associated late fees or penalties. Otherwise, your lender will likely send you a “Notice of Trustee Sale,” which confirms the date and time of the public auction of your home.
If you receive a Notice of Trustee Sale and wish to avoid foreclosure, contact a lawyer immediately. This is your last chance to save your home.
The public auction of your home must be scheduled at least 20 days after the Notice of Trustee Sale has been issued. If no action is taken by the foreclosure date, the public auction will take place, and your home will be sold to the highest bidder. You cannot in most cases retain your home after it has been sold at a foreclosure auction.
Most California foreclosures are “nonjudicial,” meaning they do not typically involve much court involvement. This benefits you, as it means you will generally not be liable for any “deficiency” that occurs as a result of a foreclosure sale. In other words, you will not typically owe anything to your lender after a foreclosure sale has been completed, even if your home sold for less than what you owed.
Foreclosure can be scary, but it is not a foregone conclusion. As a San Diego foreclosure attorney, I can help you quickly file for bankruptcy and stop an imminent auction.
You can potentially stop foreclosure and save your home even if a public auction has been scheduled. Foreclosure proceedings must halt when you file for any type of bankruptcy.
So long as you file for bankruptcy the day before the auction is scheduled to take place, the sale of your home cannot immediately continue. This is thanks to bankruptcy’s automatic stay, a court order that protects filers from all types of collection actions – including foreclosure.
Both types of consumer bankruptcy allow you to discharge qualifying unsecured debts. This means outstanding credit card debt, medical debt, personal loans, and unpaid utility bills can all be effectively forgiven through bankruptcy. While you cannot discharge missed mortgage payments, discharging these other types of debts can give you the financial flexibility you need to catch up. In many cases, you will be protected from foreclosure until your bankruptcy case has concluded, giving you the time and funds you need to raise funds, redirect income streams, and bring your mortgage current.
In a Chapter 7 bankruptcy, your nonexempt assets will be subject to liquidation. This process involves selling, or liquidating, nonexempt assets to partially repay creditors. Fortunately, you can leverage California’s exemptions to protect many types of property, including equity in your home.
In many cases, I can help Chapter 7 bankruptcy filers keep most (if not all) of their property. Filers using the System 1 exemptions can exempt up to $600,000 of equity in their primary residence, potentially protecting your home if you wish to keep it. However, Chapter 7 bankruptcies are often relatively brief. While you will be able to discharge certain types of debts, you will not necessarily have a substantial amount of time to catch up on missed payments. Once your bankruptcy case is over, your lender will be able to resume foreclosure if you have not brought your mortgage current.
Chapter 13 bankruptcy can often be more useful when looking to stop foreclosure and save your home. The process involves submitting and confirming a plan that reorganizes your outstanding obligations into a single monthly payment. The amount of this payment is tied to your current ability to pay, not the total size of your debt. This plan will last between 3 and 5 years. So long as you make your monthly payments, you will typically remain protected from foreclosure until you have completed your plan.
A mortgage is considered a secured debt, and any past due balance – called “arrears” – must be paid over the life of your reorganization plan. This is generally great news for you, as it means you must prioritize catching up on missed payments versus paying unsecured debts that you can later discharge. In other words, you can use the reorganization plan to bring your mortgage current (in addition to addressing other priority debts). Upon completing your reorganization plan, you will in most cases be able to discharge any remaining unsecured debts.
As a San Diego foreclosure lawyer, I can evaluate your unique situation and create a plan for saving your home through bankruptcy. I can advise whether filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy makes more sense in your case and serve as your guide and advocate through each step of either process.