How Should I Respond to a Foreclosure Letter?

Call an experienced bankruptcy lawyer!

Over the last several years, the number of homes going to foreclosure has reached record levels. If you are a homeowner and you receive a letter stating that your home is scheduled for a foreclosure sale,  you may feel frightened, angry, confused –or all of the above. Losing a home that you have worked hard for can be a terrifying thought. However, before you assume that you will lose your home, you should take some time to educate yourself about your legal options and consult with an experienced Texas bankruptcy attorney.

The foreclosure process begins when a borrower defaults on a mortgage loan. Although you may legally be considered in default as soon as you are late on a payments by just a few days, most lenders do not even consider foreclosure until a borrower is at least 60-90 days behind on the loan. Moreover, a lender typically attempts to work with the borrower before the loan gets to the point of foreclosure to bring the payments current. If, however, the situation has reached the point at which you have been officially been served with a letter stating that your home is going to foreclosure, it is time to consult with any attorney and consider your options.

The bad news is that the foreclosure process in Texas is very quick. In Texas, your mortgage company does not have to go to court in order to take your home through foreclosure. The mortgage company merely writes you a default letter and gives you thirty days to cure the default, then posts your home for a foreclosure auction sale  on the courthouse bulletin board 21 days before the first Tuesday of the next month and then conducts an auction sale of your home on the first Tuesday of the next month. Therefore, once you that initial foreclosure letter, talk to an experienced bankruptcy lawyer as soon as possible.

Most bankruptcy lawyers will recommend that you file a Chapter 13 bankruptcy case to save your home. In a Chapter 13, you continue to make your post-bankruptcy house payments and your paychecks are garnished to make up the missed mortgage payments and pay the remainder of your creditors. Our law firm takes the unique approach of filing a Chapter 7 bankruptcy case to stop the foreclosure sale and then immediately commencing negotiations to modify the home loan with your lender in order to reduce the interest rate, cure the default and make the home more affordable. The balance of the unsecured debt is discharged and typically new or used cars are obtained. This approach is unique but has worked extremely successfully for our clients.

Contrary to what many people believe, filing bankruptcy does not mean you will lose your home. In fact, it is often the best way to protect your home when faced with foreclosure. In addition, when you file a bankruptcy petition, the creditors are immediately prohibited from foreclosing on your home or taking any further collection activities against you.  This foreclosure injunction is in place immediately upon the filing of your bankruptcy case.  Your attorney does not even have to ask a Judge or Trustee to put the foreclosure injunction in place. . This means that the foreclosure process must come to a stop as soon as your bankruptcy case is filed.  You are then given time in either a Chapter 7 or Chapter 13 case to resolve the default on your home and hopefully retain your home permanently.

The key to protecting yourself and your home when served with a foreclosure letter is to take aggressive action by consulting with an experienced Texas bankruptcy attorney right away to find out what legal options you have. If you get that foreclosure letter and you want to keep your home, contact a bankruptcy lawyer as soon as possible!

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