After all the hard work and time spent saving money to purchase a home, it’s understandable that you’ll want to do anything to hold on to your property. However, if you’re facing financial setbacks and start to miss your monthly mortgage payments, your lender may begin the foreclosure process.
When this happens, you won’t have a lot of time to come up with a plan to save your home, and many people consider filing for bankruptcy in hopes of stopping the foreclosure. But can this actually work? The answer isn’t so simple, and if you’ve found yourself in this situation, you need to sit down with an experienced bankruptcy attorney right away to discuss your options and see whether this approach could help you.
At The Law Offices of Wes Stover in Jackson, Mississippi, we’re committed to providing a truly personal approach to all our clients and educating them on the facts surrounding bankruptcy so they can make informed decisions. Call us today to for a FREE consultation if you’re in Jackson, Laurel, Hinds County, Jones County, Madison County, Rankin County, or anywhere else in Central and South Mississippi.
Reasons for Foreclosure
Most homeowners have to secure a mortgage through a home loan lender to be able to purchase residential property. There are a variety of mortgage options, ranging from an adjustable-rate mortgage (ARM) to a 15- or 30-year fixed mortgage (also known as a conventional home loan). Once your loan is secured, you’ll be required to sign a promissory note and a deed of trust.
Essentially, these documents serve as a contract between you and the lender saying you’ll pay back the loan in monthly installments for a set period of time. And, if you’re unable to keep making these payments, your loan will go into default and your lender can take action to sell your property to recoup their losses and begin foreclosure proceedings.
Of course, no one plans to fall behind on their mortgage payments, and everyone’s situation will look a little different. You may find yourself facing foreclosure if you’ve:
recently lost your job and are having trouble finding new employment
were injured or disabled and are unable to earn the same amount of income you had before
had a large, unexpected expense or emergency that wiped out your savings
recently divorced or separated from a partner and now must support your household on a single income
move unexpectedly and are unable to sell your home
accumulated excessive consumer debt and are now unable to keep up with your mortgage payments
Whatever your circumstances are, it’s almost always worth sitting down with an attorney to see what can be done. A skilled lawyer will be able to assess your situation and offer you honest advice about your next steps.
The Foreclosure Process in Mississippi
One silver lining of the financial crisis of 2010 is that many states have since implemented stronger consumer and borrower protections surrounding mortgages and foreclosures. In Mississippi, borrowers who become late on their mortgage payments can expect several stages intended to help them stave off foreclosure:
Preforclosure: During the weeks and months following nonpayment on your mortgage, your lender is likely to contact you and start charging late fees per the terms of your loan.
Loss Mitigation: Federal law requires your lender to contact you to discuss your options to get current on your payments, which could include a loan modification, forbearance plan, or repayment plan.
Foreclosure: Most loans require you to be 120 days late on payments before foreclosure can begin, which can be judicial (involving a court order) or nonjudicial (out of court). Your lender must then publish a notice of sale for three consecutive weeks and post a notice at the court before they can auction off your property.
How Filing for Bankruptcy Affects Foreclosure
One way to stop a foreclosure sale is to file for Chapter 13 Bankruptcy. This type of bankruptcy allows you to establish a repayment plan with your creditors, which can include past-due mortgage payments. Filing bankruptcy will also trigger an automatic stay, which requires all debt collections (including foreclosure proceedings) to stop immediately. If the judge accepts your repayment plan (that typically lasts for three to five years), you may be able to avoid foreclosure if you stay current on your bankruptcy payments as well as your current mortgage payments.
This option may not be available to those who have previously declared bankruptcy or those whose income isn’t sufficient to meet their past-due debt obligations while also staying current on all new mortgage payments.
Understand Your Rights When Facing Foreclosure
If you’re in the Jackson Mississippi area or anywhere else in Central or South Mississippi and are looking for reliable legal guidance regarding bankruptcy and saving your home from foreclosure, turn to us at The Law Offices of Wes Stover. Reach out today to schedule a FREE consultation and start taking control of your financial future.