For most of us, our home is our most significant investment and expense. Since your house is collateral for your mortgage loan, you will want to keep up with those payments if you wish to keep your home. The lender can legally take back the property if you default on your payments. If you are behind in your house payment and other debt as well, you may want to consider filing bankruptcy to protect your home.
The lender can take possession of a mortgaged property, called a foreclosure, if you miss too many payments. If it is written in your contract, a lender can start foreclosure procedures after one missed payment, but they rarely do this because it is costly. You will usually get a friendly reminder that you missed a payment.
The second missed payment usually results in a phone call and possibly a less friendly reminder. If you get three months behind in your mortgage payments at this point, you will usually receive a notice that the lender is going to begin the foreclosure process.
Since a home is a fundamental need, there are many laws regarding the timing and process in which a lender can take possession of or foreclose on a primary residence.
Most states have homestead laws and exemptions. The basic protections are:
- To protect the forced sale of a home to satisfy creditors
- To protect the spouse of a deceased homeowner
- To provide certain exemptions from property taxes.
If you are behind on your mortgage and worry your home may be foreclosed on, contact a Dallas bankruptcy attorney to find out options you may have.