Are There Ways to Prevent a Home Foreclosure in Philadelphia?

Buying a home can be a very exciting moment in someone’s life. Foreclosure can feel like the worst. If you are afraid you might be edging closer toward foreclosure, talk to our legal team about what you can do.

Foreclosure is not always an unstoppable force. An attorney can review your financial situation and help you determine if there are ways to prevent foreclosure. For example, your attorney might help you negotiate with creditors to make payments more affordable or delay foreclosure. You might instead sell the home and downsize. Still, you can file for bankruptcy. Bankruptcy often has a bad reputation, but it might actually be the solution you are looking for. You can take advantage of the automatic stay imposed by the court to buy yourself more time. Your lawyer can help you decide which bankruptcy chapter is best for your situation. In some cases, bankruptcy helps people avoid foreclosure and might even allow them to keep their homes.

Our Philadelphia mortgage foreclosure defense lawyers can be reached at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519.

How to Avoid a Home Foreclosure in Philadelphia

There might be more than one way to fight foreclosure. To find the method that works best for you and your financial situation, you should speak to an attorney. Our Pennsylvania mortgage foreclosure defense lawyers can review your case and determine the best way to fight the foreclosure process.

Contact a Lawyer

Your first step should be to contact an attorney. Foreclosure proceedings tend to be rather complicated, and you need a lawyer to guide you through every step along the way. Remember, your creditor, perhaps the bank, likely has its own legal department to handle these kinds of things. You should also be legally represented to level the playing field.

Your attorney can sit down with you and comb through your finances, bank records, and records about your home and mortgage. If you do not have the funds to catch up on your missed payments, your lawyer might identify other legal channels to go through.

Negotiate with Lenders and Creditors

One method many people facing foreclosure tend to overlook is negotiating with creditors. People are often surprised to learn that just because the bank is legally permitted to foreclose, it does not necessarily have to do so. Many creditors were willing to work with borrowers so that foreclosure does not have to occur.

For example, maybe you are behind on mortgage payments, but you recently started a new job with a better salary, and you are expecting more income in the coming months to catch up on missed mortgage payments. Your creditor might be willing to hold off on foreclosure to give you time to start your new job and repay your debt. Remember, creditors usually would rather get paid what they are owed than foreclose on your home.

Sell the Home

Another option is to sell your home before you go into foreclosure. While this option does not allow you to keep your home, it does help you get around foreclosure, which might save your credit.

By selling your home, you can get some quick cash to pay back whatever you owe on the house. If you have any funds left over from the sale, they can be put toward a different, more affordable home. This downsizing method can help you avoid the negative toll that foreclosure takes on your credit. As such, you might have an easier time securing a loan for a new home later when you are more financially stable.

File for Bankruptcy

While people often shudder to think of filing for bankruptcy, it might be just the solution you are looking for. Depending on how you file for bankruptcy, you might be able to hang on to your home and avoid foreclosure. As described in more detail below, there are different ways in which a homeowner can file for bankruptcy, and each method has different pros and cons you should discuss with a lawyer.

How Bankruptcy Might Help You Prevent a Home Foreclosure in Philadelphia

Filing for bankruptcy is not a punishment, contrary to what some might believe. Instead, bankruptcy is meant to be a solution for people facing insurmountable debt. Discuss bankruptcy options with your lawyer. Depending on how things go, you might be able to avoid foreclosure and keep your home.

Automatic Stay

The court may order an automatic stay when a person files for bankruptcy. According to 11 U.S.C. § 362(a), an automatic stay is a court order that prevents creditors and lenders from initiating legal action against you for debts. If legal action is already pending against you, such as foreclosure, the legal action must halt immediately. For some, this provides extra time to reassess their finances and possibly catch up on missed mortgage payments.

Chapter 7

One of the more commonly filed forms of bankruptcy is Chapter 7 bankruptcy. This is often called liquidation bankruptcy because, according to 11 U.S.C. § 726(a), it focuses on liquidating your assets and using the money to pay outstanding debts.

Whether Chapter 7 allows you to avoid foreclosure and keep your home depends on your circumstances. For some, their home ends up being sold, and the money is used to pay back the mortgage., While this might not be a perfect solution, it does help you avoid foreclosure.

Another possibility is that you can claim a federal homestead exemption under 11 U.S.C. § 522(d)(1). Under this law, you may exempt up to $27,900 in equity in your home from the bankruptcy process. Whether this is enough to save your home depends on your situation.

Chapter 13

Another common choice among those filing for bankruptcy is Chapter 13. Petitioners would not have to liquidate their assets, including their homes. Instead, they and their attorney may devise a payment plan to help them catch up on their mortgage and other debts, according to 11 U.S.C. § 1322(a). The plan should be aggressive yet financially feasible.

People who file for Chapter 13 bankruptcy are often on payment plans for several years before their case is complete. While this might be a long time to live under a strict payment plan, it might be worth it if it allows you to keep your home and avoid foreclosure.

Contact Our Philadelphia Mortgage Foreclosure Defense Lawyers Now

Our Morrisville, PA mortgage foreclosure defense lawyers can be reached at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519.