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Scranton, PA Mortgage Foreclosure Defense Lawyer

Facing a foreclosure on your home can be incredibly scary. You might be in massive debt with the newly added pressure of being about to lose your home, too. In many cases, there is relief available, and our attorneys can help you stop foreclosure proceedings, giving you a chance to breathe and perhaps even recover your home.

Foreclosures often involve notice before anything final happens, and it is important to work with a lawyer early. From there, we can help you potentially talk with your creditor and avoid foreclosure. If foreclosure has already been initiated, we might be able to help you file for bankruptcy to stop collection efforts and halt a sheriff’s sale.

For help with your case in a free case review, contact the mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates today at (215) 701-6519.

Reasons for Foreclosure in Scranton, PA

Mortgages are often foreclosed only as a last resort. It takes banks and lenders a lot of time, effort, and money to resell homes, and it is not always in their best interests to foreclose; they usually only do this when they know that they will be able to recoup their money. As such, there is usually some big problem on the payor’s end that led to the foreclosure.

Our mortgage foreclosure defense lawyers need to understand what problems were involved in your case that led to the foreclosure. In many of these cases listed below, we might be able to renegotiate payment plans and get your mortgage back on track before foreclosure even happens; otherwise, bankruptcy might help you keep your home.

Balloon Payments

Many mortgages involve consistent payments that will always be the same amount – or roughly the same amount – across the life of the mortgage. Balloon payments are an exception to this, where a larger payment will be required either at a certain point along the life of the mortgage or before final repayment can be considered.

Balloon payments like this are often employed in down payment assistance programs, where an additional loan to cover the down payment is rolled into the mortgage but has to be paid off in full before the mortgage term is up or the house is sold. These situations and other situations with balloon payments can lead to surprise payments that put you into foreclosure.

Inability to Pay

A far more common problem is the simple inability to cover your monthly mortgage payments. In today’s economy, many people are finding it hard to get jobs, and the prices and other debts they face can quickly overwhelm them. When your choice is between paying your car loan so you can go to work, paying for groceries so you can eat, or paying your mortgage, the mortgage is often one of the first payments to stop.

If you are able to organize your finances and repay the missing payments, it might be possible to renegotiate so you can keep your house. If not, and if you are facing other debts, filing for bankruptcy might be your best option to stop foreclosure.

Technical Violations of the Mortgage Agreement

Mortgage companies often try to foreclose on loans by putting you into default for some kind of technical violation. This could be anything that violates the terms of the loan agreement as well as simple communication issues. Often, these issues can be resolved without any financial reorganization or bankruptcy if you are still able to continue paying your mortgage and do not have other significant debts.

Medical Debt

Intense medical debt can lead to hardships covering other debts, especially mortgage payments. Often, medical debt can lead people to need to file for bankruptcy, potentially saving their homes along the way.

Filing for Bankruptcy to Save Your House in Scranton, PA

If you cannot pay your mortgage and collection efforts have already begun on other debts, you might be looking at two options: lose your home to foreclosure or file for bankruptcy.

Bankruptcy is not right for everyone. If you are able to pay your mortgage but were not paying for some reason, then you might be able to resume payments and recover from foreclosure or initial proceedings without much hassle. However, if your finances are not looking great, bankruptcy might be your best option. There may also be considerations about how much equity you have in the property since selling it off might actually be a good way to cover your debts if you have significant equity in your home already.

When filing for bankruptcy, there are usually two types to consider: Chapter 7 and Chapter 13. You might be familiar Chapter 11, but that is usually reserved for businesses, not individuals and families. Instead, Chapter 7 will usually be used for those who need to liquidate assets in order to pay off their debts, and Chapter 13 will usually be used for those who can reorganize their debts into one payment to discharge their debts over time.

To use Chapter 7, you need to meet certain “means testing” standards, such as having income under certain legal thresholds. If you do not have income, it might ultimately be best to sell your home to cover your debts, meaning that Chapter 7 cannot always protect your home. Chapter 13 is likely to be more readily available to those who have income and can make some payments, making it easier to protect your home, too.

Will I Lose My House if I File for Bankruptcy in Scranton, PA?

Generally, your home is considered an exempt asset, meaning that it cannot be sold off, seized, or liquidated to pay for your debt in federal bankruptcy proceedings. This often lets you continue to live in your house while other assets are sold off or other debts are reorganized.

In addition, filing for bankruptcy automatically activates a stay – called an “automatic stay” – that blocks creditors from seizing or selling your assets. This will stop collections, foreclosure, sheriff’s sales, and other actions against your property while your bankruptcy petition is decided and the process is carried out. This can help you protect not only your home but also your car and other important assets.

As mentioned, Chapter 7 might not be able to protect your home if you have a lot of equity in it and liquidating your house could cover many of your debts. Because of this, and because of the serious commitment behind bankruptcy filings, it is vital to discuss your case with an experienced attorney before making any decisions.