Henderson Foreclosure Lawyer
Bankruptcy Can Stop a Foreclosure Sale in Nevada
In Nevada’s economy today, homes are being foreclosed at a higher rate. The increased frequency of foreclosures in the Las Vegas Metro area has led to many looking for debt relief assistance. Therefore, people unable to maintain the payments on their mortgages, go into default. Sans an agreement reached regarding payment arrangements with the bank they will probably lose their home.
Filing bankruptcy stops the foreclosure process. It allows you time to catch up on the past due amounts and to deal with your other debts. Whereas, once the bankruptcy is filed, an automatic stay stops a pending foreclosure sale on your house. Plus, it also stops any collection action on any additional debt. Also, the automatic stay remains in effect until your Nevada bankruptcy case is completed or dismissed.
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BANKRUPTCY and FORECLOSURE FAQs
A foreclosure occurs when someone who financed their home misses too many mortgage payments. The lender will take back the house, sell it, and apply the proceeds to the balance of the loan. Any remaining balance is called a deficiency balance. State laws vary on whether a lender can continue to pursue a deficiency balance after a foreclosure sale.
Both Chapter 7 and Chapter 13 activate an automatic stay of protection once the petition is filed. The Automatic Stay prevents your creditors from foreclosing your home, along with other methods of debt collection, while the case is active. However, the past-due balance of secured debts will need to be resolved before the case is closed if the filer doesn’t want their lender to proceed with foreclosure post-discharge. A Chapter 7 typically only lasts 3-5 months. Most filers will find it too difficult to keep current on their mortgage, catch up on the past-due payments, and also find the money to hire an attorney and file their case.
Chapter 13, on the other hand, works the past-due balance into the payment plan. Chapter 13 lasts 3-5 years, giving filers much more time to resolve the past-due balance. The monthly mortgage may be included, depending on which jurisdiction the case is filed in.
Chapter 7 will delay a foreclosure for approximately 3-5 months if the case is discharged, or less if the case ends in dismissal. The filer will have the opportunity to catch up on their mortgage payments in that timespan, but those filing bankruptcy to avoid a foreclosure typically opt for Chapter 13.
It isn’t too late to file bankruptcy to save your home until the sale has been completed. If it is the final hour, you should consider filing an emergency petition. You will only need basic income and identification information to file an emergency petition, as opposed to the vast array of documents you’ll need to file your standard petition. You will have 2 weeks after filing your emergency petition to submit the rest of your petition to the court.
Military personnel are protected by the Servicemembers Civil Relief Act (SCRA). Lenders to servicemembers will have to have a court order or a waiver from the borrower to proceed with foreclosure. This is known as a judicial foreclosure. If the servicemember fails to attend their court date, the court will be unlikely to enter a default judgment against them. Servicemembers may also be able to delay foreclosure for up to 90 days.
In most cases, the Automatic Stay will prevent from foreclosure until your case is completed. However, your lender may choose to file something called the Motion for Relief from the Automatic Stay. If the court grants this motion, the lender will be able to proceed with the foreclosure despite the Automatic Stay.
How Chapter 13 Bankruptcy Can Help with Foreclosure
Chapter 13 will also include unsecured debts like medical bills and credit cards. These types may not have to be paid in full in your plan before discharge, depending on your income and other debts. Your payment plan will be calculated using the full balance on arrearages, a financed vehicle, your mortgage payment in some jurisdictions, fees to the trustee, your attorney’s fees if your attorney agrees to work them into the plan instead of taking them up front, and a portion of your unsecured debts.
What Happens to Renters in a Foreclosure
If you are renting and your landlord loses the property in a foreclosure sale, in most circumstances you will still be protected by your lease. As long as you are still paying rent, the new owner is more likely to continue accepting checks rather than evict you. They may also offer you a financial incentive to move after the foreclosure sale has been completed.
Rules on how renters are treated after a foreclosure sale vary by state. Additionally, there may be a clause in your lease stating you must move if the property is sold through foreclosure. You should review your lease and consult an attorney if your landlord is facing foreclosure.
Don’t Wait Too Long to Get Foreclosure Advice
If cost is an issue, know that you can consult with an attorney free of charge. Our firm offers free consultations over the phone so you don’t even have to leave the house. Call to get started today!