Sayings like your home is you castle, Home sweet Home, There’s no place like home, and make yourself at home have certain significance to most people. A person’s Home is their castle and their Home represents a sense of strength and security for both them and their family. For most people, a Home is their biggest investment and when debt problems affect their Home they likewise affect their entire life. Debt problems affecting your Home can have a significant impact on your family and their sense of stability.
Most people buy a Home and enter into a mortgage with every good intention of being a responsible homeowner. They start by making all their mortgage payments on time, maintaining homeowner’s association dues, keeping the homeowner's insurance current as well as all paying all the property taxes on time. Then with no warning the unexpected happens. You might experience a temporary layoff or job loss, or maybe you encounter a temporarily illness which incurs unexpected medical expenses. It’s possible that you may have to make a choice between paying the mortgage payment or repairing the family car that gets you to the job that makes the money to pay the mortgage payment. Other times it may be a necessary Home repair decision to either repair the sudden broken pipe that threatens to flood damage the entire home, or to pay the mortgage payment and let the home flood instead. The next thing you know you’re behind on a House payment or homeowner association dues, or taxes and one of your creditors wants to foreclose.
Bad things sometimes happen to good, honest, hard working people which often can bring their financial world to a screeching halt. The first course of action when you fall behind on a mortgage payment before the foreclosure process ever begins is to contact the lender and attempt to work it out. Maybe you might be able to defer the missed mortgage payment(s) until the end of the loan. Maybe the mortgage company offers some type of forbearance agreement or additional grace period. Whatever the case may be the first step is to attempt to negotiate with the mortgage company if you have trouble making your payments. If after you have tried to negotiate some type of work out arrangement or don’t receive a response at all, you may want to contact a lawyer to examine your options under Chapter 13 Bankruptcy. If you’re eligible to file Bankruptcy in Texas the Texas Bankruptcy Exemptions like the Federal Bankruptcy Exemptions allow you to protect a certain amount of equity in your Home.
Hopefully you will never have to experience the prospect of foreclosure. But should you experience the unexpected financial problems life can bring and you find yourself facing foreclosure, you have options to stop foreclosure and repay the payments over time in a Court supervised repayment plan. Chapter 13 Bankruptcy allows eligible people who are facing foreclosure to regain control of their finances and make repayment of their arrearages based on terms their budget states they can afford.
Most all real estate in Texas is financed by the actual purchaser, by providing a promissory note and a mortgage referred to in the State of Texas as a "deed of trust" to a lender, in return for the money used to purchase the real estate. The “deed of trust” names a person, which is most often an attorney hired by the lender, who acts as a Trustee. Your real estate or real property is technically held by the trustee who holds the legal title to your property in trust for the lender. Should you the mortgagee default by failing to make payments, tender the contractual escrow reserves or anything else that constitutes default under the lending agreement, the lender will then order the trustee to sell your property at a foreclosure sale.
The foreclosure process may begin when an unexpected event prevents you from making a payment or payments when due and for whatever reason you are facing foreclosure. Sometimes even a single late payment could prompt a lender to consider it a mortgage default and you may be facing a foreclosure. Sometimes certain mortgage creditors will even commence a foreclosure the moment you’re late by sending you a certified letter immediately. Since there is no requirement that a notice of a foreclosure sale has to actually be received, it only makes sense to always retrieve certified mail from the post office. The lender’s only requirement is that a notice be sent to the last known address of the debtor according to the lender's records. Once notice is sent by the lender which may or may not be picked up by you, the lender posts a notice of sale at the door of the county courthouse and files a foreclosure notice with the country clerk 21 days prior to the foreclosure sale and if the property to be foreclosed is homestead property, an additional twenty day written notice by certified mail must be sent to you before the debt is accelerated. Now posting a sale at the door of the county court house is exactly that. If you walk into a county court house in Texas you will likely see numerous legal papers and pleadings attached to binders or bulletin boards on the walls of the court house lobby or fairly close to the entrance door. Texas does not require the lender to publish notice of the sale in the local newspaper. Most major Texas counties have electronic access to their foreclosure postings through their clerk’s website. There are also various services in Texas that collect this information from the court house postings and publish them.
All foreclosure sales in Texas are between 10 a.m. and 4 p.m. on the first Tuesday of the month (regardless of holidays) and usually take place on the county courthouse steps or just in side the court house lobby. The foreclosure sale is conducted by a sale trustee and just like a public auction the property goes to the highest bidder. The highest bidder must pay for the property in cash at the time of the sale, however the sale trustee may allow some time (within the same day) for the highest bidder to pay the entire amount in full. The lender is also eligible to bid on the property if they choose to do so and you are entitled to know what the lender in fact bids on the property. If you’re interested to know what they intend to bid you can call the particular trustee or lender’s office prior to the foreclosure sale and simply ask what they intend to bid on the property, in case there are no other bidders. Keep in mind they have no obligation to tell you, but most trustees/lenders don’t want to actually take the property back due to the costs involved and may just tell you. Depending on the mortgage contract the lender may also eligible to “credit bid” on the property if they so choose.
After the actual foreclosure sale the trustee then transfers title or ownership to the highest bidder free and clear of any junior liens but sill subject to any senior liens. If the bid amount is higher than the amount owed to the lender, any extra monies will go to junior lien holders.
When facing a foreclosure Bankruptcy can be an option to address losing your home. There are options for people who decide to file Chapter 13 Bankruptcy to save their home from foreclosure. Filing bankruptcy (any type) generally halts the foreclosure of your home. The automatic stay goes into effect upon your filing however there are elements of the new bankruptcy law that affect the automatic stay which should be discussed with an experienced bankruptcy attorney. Your lender must cease its foreclosure attempt immediately. You will then have time to decide what to do. If your lender is threatening foreclosure or has initiated foreclosure proceedings, you should contact us right away. You cannot save your home once the foreclosure sale has begun.
If you file bankruptcy under Chapter 7 of the Bankruptcy Code, you can choose to reaffirm your mortgage debt and keep your home. However, if you are behind on your payments, you must catch up before you can reaffirm. If you do not have the ability to bring your payments current, your lender can get the Court to lift The Automatic Stay so that it may proceed with the foreclosure. The lender must then sell the property and credit the proceeds to your debt. If any money is left over, the lender must pay it to you. Typically, the sale brings in less than the debt which, in most cases, you will technically owe. The Bankruptcy Court will discharge the balance along with your other unsecured dischargeable debts. A Chapter 7 Bankruptcy may not be able to save your home if it is worth more than the amount of the mortgage plus your exempt equity and the costs of the sale. In that instance, the Trustee could take the property, sell it, pay off the debt and the costs of the sale, take their commission, pay you the balance of equity you may be entitled to under the exemption scheme, and distribute the remainder to your unsecured creditors.
If you file bankruptcy under Chapter 13 of the Bankruptcy Code, you can also choose to keep your house. You must continue to make your current payments and catch up on your arrears through a Court supervised plan of repayment. Unlike Chapter 7, you do not have to pay off your past-due balance in one lump sum. You can pay your arrears through your Chapter 13 repayment plan. The Bankruptcy Code requires that you cure your default within a reasonable time. The Court usually requires that you make up your missed payments within a year of filing.
For most people their home is their largest investment and often their most significant asset. It is important to get all the facts when facing foreclosure or the implications of bankruptcy and your home.
If you need to consult a lawyer about Debt Relief of have questions about Bankruptcy and Foreclosure in Texas or filing for Chapter 13 Bankruptcy please contact The Law Offices of R.J.Atkinson,LLC at 800-436-9056 for a free initial consultation to discuss your legal options. With locations in Houston, San Antonio, Austin, and Dallas we are a Texas Debt Relief Agency and help people file for Bankruptcy under the Bankruptcy Code. Don’t Lose Everything.
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