Foreclosure and Bankruptcy – what anyone affected by foreclosure should know

If you’re worried about losing your home to foreclosure and are delinquent on your mortgage payments, there are some financially strategic things you can do to save your home. It is best to learn about the foreclosure laws in our state and understand the well-documented case law. You should probably seek professional advice from a bankruptcy attorney who has dealt with such issues immediately if you wish to avoid foreclosure.

Did you know that once you file for Chapter 7 bankruptcy in California, the bank cannot foreclose during the process, which takes about 3-4 months? The lender can ask the judge to circumvent this general rule and call for early termination or a forced sale, but it is rarely granted without extenuating circumstances.

In Chapter 13 bankruptcy, you must keep your mortgage payments and/or make a deal with your lender, otherwise the lender may ask the judge to do a foreclosure anyway. Depending on your relationship with your lender and your good faith, the judge will sometimes allow this. Again, it’s best to ask your bankruptcy attorney what to do and how to do it to have the best chance of keeping your home when it’s over.

Can You Stay in Your Home After California Foreclosure?

Turns out you can stay in your home after foreclosure and until the final sale, although that would be scarce. Generally, after a foreclosure, it takes anywhere from 2 months to a year for the actual sale to take place. This applies to both judicial and extrajudicial executions.

In fact, there’s a terrible problem in California where the family that once lived in the house before foreclosure leaves as requested, but then a new party, a homeless squatter, moves in and stays in the house until it’s sold, often until the new owners try to move in. Sometimes the new owners have to file an eviction notice, which also takes time. It’s an interesting world to live in, but that’s exactly what’s happening here in California.

There have been a fair number of cases in Ventura County where this has happened. Squatters use the Internet to learn about loopholes in the law, often watching YouTube videos. Some of the advice is rubbish, some is valid. In any case, it’s causing a problem in neighborhoods around the Ventura County area and in nearby adjacent neighborhoods that are in Los Angeles County.

Can You Buy a New Home After Filing Chapter 7 Bankruptcy?

The answer to this question might shock you. After all, people assume that filing for bankruptcy is the kiss of death and their credit will be shot for good, or at least a decade. Not so. In fact, you may qualify for a home loan and mortgage 24 months after you filed for bankruptcy, provided you have adequate income to service the loan payments at the time.

The situation is similar for Chapter 13 bankruptcy, but there are other things you need to know and you should consult a bankruptcy attorney in your area who specializes in these places to get all the correct details.

What can I keep out of my home in a bank foreclosure?

This is a very important question and if you get it wrong you could end up in jail for grand theft. You cannot take solar panels, water heaters or built-in appliances with you. Try not to take garbage disposals, compactors, built-in stoves, dishwashers, or air conditioners with you. You cannot use intruder alarm systems, smoke detectors or smart house systems built into the home as an integrated system. You can take televisions, refrigerators, washing machines and dryers with you.

You cannot take an outdoor patio system that is anchored to one or more sides or top of the house. Basically, the law states that you are not allowed to take anything that is attached to the building or property. The same applies here: take these rules seriously and contact your insolvency administrator if you have any questions. When you have to leave and have exhausted all other options, do it right. You don’t want to start your fresh start with a new criminal conviction — that doesn’t look good on any resume.

There are ways to avoid foreclosure in California

The easiest way is to ask your lender for a loan modification. The bank doesn’t want to take your house back, they just want to be paid. Therefore, it is in their best interest to work out a cheap deal that will get you making payments until that mortgage is paid off in full. Sometimes lenders won’t budge on the first request, but when a lawyer contacts them on your behalf, it’s amazing what you can negotiate.

Of course, if you pay off your mortgage, the lender can’t close it, which is another option. Get a loan from another source and pay off the mortgage. You can also sell your home in a short sale or for the balance of the mortgage. Although you won’t get any equity back, your loan will be great once you’ve paid it off.

Other considerations

After the real estate crash of 2008, many service providers made mistakes in the documents. The court no longer takes the floor from the borrower. If you have made a serious mistake, your lawyer is now in a very favorable position to negotiate for you. At the very least, your bankruptcy and foreclosure attorney will get the lender to start the process all over again and, at best, save you tens of thousands of dollars and a truly outstanding renegotiated mortgage rate and terms. Be sure to get all the facts.