When you fall too far behind in your home payments, the mortgage lender starts a process called foreclosure. If you default on your loan, the lender can take possession of your home and sell it to get back some of the amount due on loan. The foreclosure process can be anywhere from one to seven months to complete depending on the state you live in.
Many people file Chapter 13 bankruptcy to keep their homes. If you file bankruptcy, the foreclosure and all other legal actions against you will stop due to the automatic stay that goes into effect as soon as you file with the courts.
Legally the lender can start the foreclosure process with the first missed payment. They are hesitant to do that since it is costly for the lender and they generally do not get the full amount due on the loan in a sale.
Judicial and Nonjudicial
There are two types of foreclosure proceedings, judicial, through the courts and overseen by a judge and nonjudicial as written in the loan contract and will not go through the court system. In both types of foreclosure, the lender has the right to sell the property to try to collect on the money due on the loan.
If you file Chapter 13 bankruptcy, you will make court-approved payments of three to five years to catch up on your mortgage and other debt. At the end of the repayment period, you will need to continue to make your mortgage payments if you wish to keep your home.
If you are worried you are about to lose your home, contact a Fort Worth bankruptcy attorney to find out what options you have to keep your home and get some financial relief.