Few people own their homes outright. And when you fall behind on the mortgage or have borrowed against the equity in your home and can't repay the home equity loan or "second mortgage," you could be in danger of having your home foreclosed on.
In California, there are a number of different types of foreclosures. Most commonly, home foreclosures are non-judicial. This means there is not need for the lender to take you to court because a clause in the deed of trust allows them the power of sale. They can simply repossess the home and sell it. But if they do this, they can't charge you for anything outstanding on the loan, should the sale not bring in enough to cover what you still owed them.
In a judicial foreclosure, a lawsuit must be filed and a court process gone through before a court-order allows the home to be sold by your lender. But, you can buy the home back from the highest bidder within the "right-of-redemption period" if you have enough money and decide to do so.
Filing for bankruptcy will put an automatic stay in place that can prevent a home foreclosure, the enforcement of liens on the property, or continued collection attempts.
After a Chapter 7 is filed, the court must order its permission before your mortgage lender can proceed with a foreclosure and eventually an eviction. This may or many not ultimately avert the foreclosure, but it at least buys your a few months before you have to move out. Technically, the lender can file for relief from your automatic stay, but they usually won't but just wait out the last 3 or 4 months before you move.
If you are looking to save your home, on the other hand, Chapter 13 is usually the best route to go. This will allow you to reorganize your debt and catch up on past due mortgage payments over 3 to 5 years.
At San Diego Bankruptcy Attorney, we can help you save your home or at least gain extra time before you have to find a new one. We can help you decide which type of bankruptcy to file and then guide you step by step through the whole process.
