Many people filing for bankruptcy are facing foreclosure. Foreclosure is a legal process in which a mortgage lender tries to claim ownership of the home after the homeowner has defaulted on regular payments. This process can be a stressful one, and it can make a homeowner feel like they have few options, but, in reality, there are solutions that can help. Below, learn more about these solutions, as well as more about the foreclosure process itself.

What Happens During Foreclosure?

Once a homeowner has missed a certain number of monthly mortgage payments, they have violated the terms of the mortgage agreement. The lender can then seek ownership of the home so it can be resold. In some states, a lender can choose to file either a judicial or nonjudicial foreclosure. A judicial one is a civil lawsuit in which the lender essentially sues the homeowner to get the home back.

A nonjudicial foreclosure does not involve the courts in any way. In Ohio, only judicial foreclosures are allowed. Once the case is filed with the courts, the homeowner will be served with a foreclosure notice, and the court will determine the date of the public or private auction at which the home will be sold.

When Can a Lender Foreclose on a House?

A lender can start foreclosure action as soon as 60 days after a missed mortgage payment. The overall foreclosure process takes longer, usually between 150 and 180 days. But if the homeowner files for bankruptcy or contests the action, this timeframe will likely be lengthier.

What Benefits Does Bankruptcy Provide in a Foreclosure?

When a person files for bankruptcy, the courts issue an automatic stay on all foreclosure action in process against the filer. In most cases, the stay lasts 30 days, but this can be enough time for you and your attorney to make important decisions about whether to keep or sell the house. Chapter 13 bankruptcy restructures existing debts into a long-term repayment plan, so you may be able to keep the home, so long as you can stay current on the present monthly payments, as well as the late fees that are part of the bankruptcy plan.

Chapter 7 bankruptcy eliminates debts, and, in this case, you might decide to sell the property so you can offset some of these debts. This especially makes sense if you can rent a home for less than the current monthly mortgage. But be sure to consult with your attorney, as every case is different, and there may be other solutions worth exploring.

When faced with foreclosure, filing bankruptcy can buy precious time, which is why attorney Harry B. Zornow is here to help. For over 30 years, he has been representing the Hamilton, OH, area in bankruptcy cases. From straightforward to complex bankruptcy claims, from foreclosures to wage garnishments, Attorney Zornow will guide you at every stage of the legal process. Call (513) 737-9770 or visit his website to schedule a consultation.