Posted by alex , on Jun, 2015
When homeowners start to get into financial trouble, sooner or later it becomes impossible to make the mortgage payment on time. Banks often don’t allow someone to make partial payments to catch up. They want the entire back payment as well as the current payment. The situation escalates as the home-owner falls farther behind. After many collection calls, the day arrives when the mailman delivers the foreclosure notice.
For most people, their home is their primary asset. While some people accept defeat, pack their belongings and move, this does not mean that they are now free of financial responsibility for the home. Many home-owners have been shocked to learn that they can lose their home and still owe the bank money.
For example, a homeowner may negotiate a “short sale” on their home for less than the amount due on the mortgage. The bank may agree to the short sale, but the homeowners could later find that they owe the balance between the short sale and the mortgage as a result of a deficiency judgment. If the mortgage was $200,000 and the short sale was for $150,000, the former homeowner could find that $50,000 is still due to the bank. If pursuing a short sale, it is crucial that the agreement with the bank specifies that they will not pursue the former homeowner with a deficiency judgment.
For many homeowners, a Chapter 13 bankruptcy is a better choice, allowing them to keep their home. If the homeowner has a regular income and would be able to repay some level of debt, the Court would establish a repayment plan that would last for 3-5 years. During the repayment plan, the homeowner would catch up on their back mortgage payments as well as other debt (credit cards, medical bills, etc.). When the bankruptcy became final, the homeowner would be current on their mortgage and balances remaining on other debt that was included in the bankruptcy would be discharged.
Don’t leave your home before talking to Joseph I. Wittman, an experienced Foreclosure Lawyer in Lawrence KS. It’s important not to wait before exploring your legal options with a Foreclosure Lawyer in Lawrence KS. Click Here to learn more and to schedule a free initial consultation.