Are you facing bankruptcy and foreclosure? Often times bankruptcy and foreclosure go hand-in hand, but they are really two different issues. You do not have to go through bankruptcy if you are facing foreclosure. You do not have to have your home foreclosed if you are facing bankruptcy. Foreclosure occurs when a person fails to make payments on a mortgage on their home. The mortgage company files for foreclosure to get your home to sell it and pay the debt. Typically, you fall behind in your house payment because you are paying other debts to creditors that are more demanding or you just don’t have the money.
What is the foreclosure Process in Michigan?
In Michigan, the mortgage company will send you notice and call you when you become delinquent on the mortgage payment. At some point, typically 90 days late, they refer your home to a foreclosure attorney to start the foreclosure process. Foreclosure starts with notice being sent to your home, a notice posted on the door, and notice being published for 4 weeks in a local new paper. In the notice, it will tell you the sale date. That date is extremely important. Prior to that date, you can file for chapter 13 bankruptcy and stop the foreclosure. After that date, you cannot stop the foreclosure. If you want to save your home you would need to either pay the full balance owed on your home (which is unlikely because you can’t even make the payment) or file for chapter 13 bankruptcy which will allow you to get caught up on the payments over a 60 month period. It can also give you time to sell your home to protect your equity. For example, you would pay the trustee the payment plus 100.00 toward the back payments to get caught up. This would pay a 6,000.00 dollar arrears (100.00 times 60 months = 6,000.00).
What if I don’t want to keep my home or I can’t afford it?
If you do not want to keep you home, you do not have to file for bankruptcy. You are allowed to stay in your home for 6 months during your redemption period. At the end of your redemption period, you will be a tenant and the mortgage company will evict you. You will have a foreclosure on your credit report will prohibit you from getting a mortgage for about 48 months. There is typically no deficiency for the bank to sue you over. If you have a second mortgage, they can sue you for the amount owed. This may require you to file for chapter 7 bankruptcy to discharge the debt.
If I go through bankruptcy is my house going to be foreclosed?
No. If you are current on your payments, you can go through bankruptcy and keep your home. Bankruptcy allows you to discharge your unsecured debt and keep you home. You are more likely to make your payments because you have no other debt. It is important that you continue to make payments and you are current on your house payments at the time of filing. If you are behind, you should quit payment credit cards and medical bills and focus your money on your home. You must prioritize! Your house is the most important asset. Often times, a person falls behind on their mortgage because they have to much unsecured debt. By filing for chapter 7 bankruptcy, you can discharge your other debt and just pay on your home and cars.
How do I get started with my bankruptcy?
Getting started is easy. Just pickup the phone and call our office. You will speak to a bankruptcy lawyer immediately. 616-459-6636.
A Grand Rapids bankruptcy lawyer at Krupp law Offices PC can answer all of you bankruptcy and foreclosure questions.
KRUPP LAW OFFICES PC
Grand Rapids Bankruptcy Lawyer
161 Ottawa NW Suite 404
Grand Rapids MI 49503