Are There Ways to Prevent a Home Foreclosure in New Jersey?

People often spend years paying off mortgages, and their financial situation might change quite a bit during this time. If you find yourself unable to keep up with payments, talk to a lawyer about how to avoid foreclosure.

One way of preventing foreclosure is to file for bankruptcy. While bankruptcy is not exactly an ideal solution, it might be a solution, nonetheless. Through bankruptcy, you might liquidate other assets to cure the default on your mortgage. You might instead devise a payment plan to help you catch up on numerous debts, including your mortgage. There might be alternative ways to prevent home foreclosure. You might sell the house and use the proceeds to repay the mortgage. You might instead work out an agreement with the bank or other creditors to buy extra time to get your finances in order. Perhaps the best thing you can do is to speak to a lawyer about your options. Your attorney might even help you challenge the foreclosure in court, as New Jersey is a judicial foreclosure state.

Please ask our New Jersey mortgage foreclosure defense lawyers for a free review of your case by calling Young, Marr, Mallis & Associates at (609) 755-3115.

Filing for Bankruptcy to Avoid a Home Foreclosure in New Jersey

While most homeowners want to avoid foreclosure, they might think of bankruptcy as their way out. Most people consider bankruptcy to be the option of last resort. While it certainly comes with some drawbacks, bankruptcy might be the solution you are looking for. In some cases, it can help people avoid foreclosure.

Chapter 7 Bankruptcy

One option is to file for bankruptcy under Chapter 7, a common option for individuals with fewer assets. Under Chapter 7, a bankruptcy trustee may liquidate your assets to pay off your debts. In some cases, this might mean losing your home. However, the liquidation of your home avoids the foreclosure process. Depending on how things go, the money you get from your home might cover your mortgage and various other debts, allowing you to start over with a clean financial slate.

If you have other assets you want to liquidate first in the hopes of keeping your home, talk to your attorney. Coordinating with the bankruptcy trustee might be possible so that other assets you do not mind parting with are liquidated instead of your home. This might be feasible if you have valuable assets like a vacation home or vehicles you do not need.

You might also claim the federal homestead exemption under 11 U.S.C. § 522(d)(1), which may exempt up to $27,900 in your home’s equity.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy works much differently than Chapter 7. Instead of liquidating assets and properties and potentially losing your home to bankruptcy rather than foreclosure, you might not have to liquidate anything. Instead, you and our Trenton, NJ mortgage foreclosure defense lawyers must come up with a payment plan to help you get back on the right financial track.

Payment plans should be aggressive yet financially feasible. As such, people on Chapter 13 payment plans have very little wiggle room for superfluous or luxury purchases. Also, many people must spend quite some time on their payment plans. Many bankruptcy petitioners spend about 3 to 5 years adhering to their plans before their case is complete.

Other Ways to Prevent Home Foreclosure in New Jersey

If bankruptcy is not something you are ready to consider, your lawyer can help you explore other legal options for avoiding foreclosure. Some options might involve more formal legal procedures, while others involve informal agreements with creditors and lenders. Our team can help you figure out something that works for you.

Selling the House

One option is to sell your home and downsize. While you might have had plans to stay in your home for many years to come, it might not be financially possible. Rather than lose your home to foreclosure, you can instead quickly sell your home, use the proceeds to pay off your mortgage and clear your debt, and put any remaining money toward a different, more affordable home.

While you cannot keep your home in this scenario, you may avoid foreclosure, which might save your credit so you can buy a more affordable home later. Talk to your attorney. It might be a wiser idea to cut your losses, avoid a massive hit to your credit, and begin planning for a different home in the future.

Working Out Agreements with Creditors

Talk to your attorney about how much money you owe toward your mortgage and how far behind you are on payments. It might be possible to work out some sort of deal with your creditors to avoid foreclosure. Creditors just want to be paid at the end of the day. If we can pay something now, we might convince creditors to delay foreclosure.

Is there a way we can negotiate with creditors to make your payments more affordable? Maybe your creditors will agree to work out a new monthly payment that is more affordable. However, there might be some trade-offs, and you might have higher interest rates.

Are you expecting a financial windfall in the near future? If we explain the situation to your creditors, they might hold off on the foreclosure until your money comes in. For example, maybe a family member just passed away, and you are expecting a large inheritance. Explaining this to your creditors might persuade them to hold off on foreclosure until your inheritance comes in. Remember, creditors just want to be paid.

Challenging the Foreclosure in the New Jersey Courts

Since New Jersey is a judicial foreclosure state, we might be able to challenge the foreclosure in court if there are no other ways of avoiding it.

There might be numerous grounds on which to challenge the foreclosure. For example, according to 12 C.F.R. § 1024.41(f)(1), creditors may not foreclose until you are no less than 120 days behind on payments. Tell your attorney if you are not far enough behind for creditors to begin the foreclosure process. It is possible that your creditors made a clerical error and jumped the gun on the foreclosure. It is also possible they are using underhanded tactics to get you out of your house.

You also have a right to cure the default, according to N.J.S.A. § 2A:50-57(a). This means that if you can come up with the money to cover your debts and various other costs before the sale of your home, you may keep your house and avoid foreclosure.

Speak to Our New Jersey Mortgage Foreclosure Defense Attorneys Today

Please ask our Union City, NJ mortgage foreclosure defense lawyers for a free review of your case by calling Young, Marr, Mallis & Associates at (609) 755-3115.