The Bankruptcy Law Clinic Blog

Saturday, August 24, 2013

How to Avoid Losing Your Home

Florida Leads The Nation in Vacant Foreclosures—How to Avoid Losing Your Home

If you are going through a foreclosure or if you are on the brink you are not alone.  According to RealtyTrac, a real estate research firm, Florida has the most vacant foreclosures in the country—about 55,503 of the total.  A vacant foreclosure is when a family leaves a home empty because they can’t pay the mortgage.  Even though the economy seems to be improving, some families are still struggling to hold on to their homes.  Many don’t want to file bankruptcy for fear they will lose their home.  They wait too long and they end up facing foreclosure anyway.

Your home doesn’t have to become a vacant foreclosure or sold on the courthouse steps.  And you don’t have to be afraid of bankruptcy.  We at the Bankruptcy Law Clinic have had a lot of success working with clients with a new loan modification program.

Here’s how we could help you with a loan modification inside of a Chapter 13 Bankruptcy:

  1. No more endless rounds of duplicate or “lost” paperwork.  The loan modification is included inside of a Chapter 13 Bankruptcy which has its own very extensive paperwork requirements.  You can be sure, with the power of the U.S.  Federal Bankruptcy Court involved; banks will keep better track of the paperwork provided or risk receiving sanctions (fines) from the bankruptcy court.
  1. Balance of power has shifted.  In a normal loan modification, you send your paperwork away and the bank eventually gets back to you with a proposed modified interest rate, term, monthly payment, etc. and you can basically take it or leave it.  When you do it in a Chapter 13 Bankruptcy, WE CREATE the proposed loan modification with the terms we’ve created and the banks must react to what we have created.
  1. Prompt response.  We’ve all heard the horror stories of people being in loan modification programs for years, with the bank rejecting their loan modification for numerous reasons, sometimes even after they have successfully made their trial payments.  With the U.S.  Bankruptcy court taking an active interest, you can be sure that your bankruptcy and loan modification will move swiftly.  The new lower mortgage is reflected in the first payment in a Chapter 13 Bankruptcy, which is typically sent only 30 days after your bankruptcy is filed.  One month vs.  two years?  I know which one our clients prefer!
  1. No additional upfront fees.  Depending on the law firm and the complexity of your case, some law firms charge from $1,500 to $3,600 for a loan modification.  When you do your loan modification inside of a Chapter 13 Bankruptcy, no additional upfront legal fees are required beyond what you already are paying for your bankruptcy. 
  1. All the normal benefits of a bankruptcy.  When you do a bankruptcy, you eliminate all your unsecured debts, which means in addition to a lower first mortgage, we may be able to strip and eliminate your second mortgage and your Home Equity Line of Credit.  We will also eliminate all the credit cards, car repos, medical bills, payday loans and other bills that prevent you from getting the fresh start you deserve.

This is not an easy process.  But it is one that we do for our clients, allowing them to stay in their homes, eliminating their debts and giving them the fresh starts they deserve.


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