Avoiding Foreclosure

Once you miss a mortgage payment, it can be extremely difficult to get caught up.  Now, not only can you not make the payment in the first place, but to get caught up, you may have to make two, or three, four or even more delinquent payments, plus penalties and interest.  If you do nothing to resolve the situation, your lender WILL take your house away from you, and have you evicted by the local authorities.

If you’re considering taking refuge in a bankruptcy, or have already done so, you may soon discover that a bankruptcy is not really a viable solution to your financial problems.  Beginning in 2005, most bankruptcies are now Chapter 13 filings, not Chapter 7.  The difference is that with a Chapter 13 filing, you are required to pay most if not all of your indebtedness back to your creditors anyway, under the terms of a payment plan that can last from three (3) to seven (7) years.   In contrast, a Chapter 7 bankruptcy filing typically results in liquidation and forgiveness of most debts, with no repayment plan.  But since the new rules were adopted, only a very few individuals are “awarded” permission to file a Chapter 7 bankruptcy by the Bankruptcy Court, and there must be compelling reasons for it to do so.  With today's "normal" Chapter 13 filing, once you have a payment plan approved, you must STILL pay all your regular monthly bills PLUS the amounts required in the payment plan.  If you can’t meet your obligations under the payment plan, your creditors or the bankruptcy trustee can make a motion to the court that may result in having your bankruptcy dismissed.  If that happens, you lose all your protections from foreclosure and other collection activities – and you CANNOT just re-file another bankruptcy.  You're back in the same situation you were before you filed bankruptcy, only now there are even MORE late fees, interest charges and legal fees due.

Somewhere around 90% or more of the Chapter 13 bankruptcies filed end up being dismissed in this manner, because people just cannot afford the payment plans they've agreed to.  Even if you somehow make it through the payment plan process, and your bankruptcy is discharged (meaning you’ve met your obligations, paid your creditors and everything is good), your credit is destroyed for at least ten (10) more years.  Those ten years don’t even START until you’ve met your obligations and your bankruptcy is discharged.  If you have a five (5) year payment plan for example, your credit is destroyed for at least fifteen (15) years (five year payment plan plus ten years’ bankruptcy legacy) before you can hope to put the bankruptcy behind you.

So in most cases, all you’ve been able to do by filing bankruptcy is briefly postpone the inevitable, and at a terrible cost.

If you haven’t filed bankruptcy, there is usually no good reason to do so, especially under today’s rules.  But please do not make any determination about your own status and situation without checking with your attorney.

As a general rule, foreclosures are completely avoidable, if you know how to avoid them.  How you go about avoiding them depends a lot on your personal and financial situation – but also, on how you want the situation resolved.  Do you want to keep your house, for example?  Or maybe you want a clean, fresh start without the burden of a mortgage payment on a house you can’t really afford, and with no additional damage to your credit score.  At International One Skyline, we have a lot of experience in helping our clients avoid foreclosure in many different ways.  Don't let foreclosure just happen.  Contact us today for a private, strictly confidential assessment of your situation.  We’ll be upright, straightforward and totally honest about how we may be able to help you.  Just visit our Contact Us page, call us at 888-400-9862 or 512-697-9664, send an email to Inquiries@InternationalOneSkyline.com or click here to leave your contact information and sign up for our Newsletter.  We’re here to help you, and we're looking forward to talking with you.