Foreclosure Article


Will bankruptcy save my home from foreclosure?

WILL BANKRUPTCY SAVE MY HOME FROM FORECLOSURE?

What will bankruptcy do?

When bankruptcy is filed it provides an automatic stay in foreclosure proceedings.  This means that a trustee sale cannot be held so long as the bankruptcy is filed before the trustee sale starts.

Do I automatically get to keep my home if I file bankruptcy?

No.  Bankruptcy does not allow the homeowner/borrower to keep their home while also ending their obligation to pay the home loan.  Bankruptcy may be tool to provide temporary or long term assistance to the borrower but it’s a strategy that should be pursued after consulting with an attorney.

How can bankruptcy help?

There are a couple of ways a bankruptcy might help, and may be recommended by your attorney. 

The effect of filing a bankruptcy grants an automatic stay in debt collection efforts including foreclosures.  An automatic stay basically means all collection, repossession, and foreclosure efforts are put on hold until the bankruptcy process is complete.  This period may allow your attorney to work through your foreclosure case more thoroughly or give her or him time to work something out with the lender. 

Another way a bankruptcy might be helpful is that it may allow certain debts to be discharged, meaning your obligation to pay ends, or it may reorganize your debts into a more manageable payment.  This may help by freeing up money so that you can more easily make your monthly payments.

Is there a downside to declaring bankruptcy?

Bankruptcy may negatively impact your credit score however at the point most people are considering bankruptcy, their credit scores have already taken a hit.  There may be other cons to pursuing the path of a bankruptcy but they will depend on other factors that your attorney will discuss with you.  Remember no one case is the exactly the same as another. 

Bankruptcy is often made more difficult when mistakes are made in the process.  Often people will file before meeting with an attorney and overlook important facts or issues in their case.  Other common mistakes occur when individuals, in anticipation of filing bankruptcy, make additional purchases or attempt to pay off certain debts to maintain relationships with whoever lent them the money.   This should be avoided until consulting with an attorney because certain purchase may make the bankruptcy look fraudulent, and payments made can be undone through the bankruptcy process - adversely affecting both the borrower and the person or business that lent the money.  Meeting with an attorney, even if it’s just for a brief consult could prove instrumental in making the process smoother, less stressful, and help avoid these and other pitfalls. 

Where can I get more information about bankruptcy?

The US Bankruptcy Court of Arizona has vast amounts of information online as well as a help center and hotline to answer questions.  The hotline number is 866-553-0893.  However, individuals should also contact legal aid, especially if they are also dealing with foreclosure related issues or at risk of foreclosure.  To apply for legal assistance use the Access To Justice Online Intake System.

Where can I find legal help with a foreclosure?

Individuals faced with loss of a home through foreclosure/trustee sale or dealing with issues related to a foreclosure can apply for free and reduced fee legal services through the Access to Justice Online Intake System, the link is also available on the top right of AZLawHelp under the “LegalLEARN” section. Individuals may also contact legal aid directly, however due to high call volume there may be long wait times on the phone and the phone system may disconnect calls when overwhelmed. To find the legal aid agency serving a particular county in Arizona, select the desired county in the drop-down under the section titled “FIND FREE LEGAL HELP” on the right column of AZLawHelp.


Comments:

QUESTIONS

  • I relocated to AZ and still have a house in Nevada. I can no longer make both house payments and am considering letting my house in NV foreclosing or short sale. Not sure what tax liabilities or other repercussions may he entailed.
  • My home was sold at a foreclosure auction on 11/22/16. I have never been served a 3 day notice by the new owners just a Summons and Complaint. They want me out of the property and want to charge me an outstanding amount of money and I cannot afford to pay it. They are trying to get a default and judgment against me and I am living in the house with my 8 year old granddaughter. I work 4 days a week and need time to secure another place for us to live. These people are very unreasonable and want me out. I have lived there for 23 years and am having alot of anxiety over this. HELP
  • Are purchase money mortgages limited to no recourse notes?
  • My home has recently been foreclosed on. I have a HELOC attached to the dwelling. Am I responsible for repaying this debt?
  • A sibling had a piece of land that was sold in a trustee's sale in June 2016 . It was 2.55 acres and had no single family residence. I am clear that it doesn't fall under the deficiency exemption because of the size of the lot and no home. Since it's been over 90 days, is it safe to say there will be no legal recourse? Can they still send the debt to ordinary collections agent? Thank you
  • Can my lanlord come after me for the money if i break my lease early, and the house is in foreclosure?
  • Does the Superior Court have a procedure for expedited processing of time sensitive cases? If so, would that procedure be applicable to a foreclosure of the right to redeem a tax lien?
  • I live in a house at my parents on their both deceased and I want to file bankruptcy on the house I'm only the void foreclosure can I do this legally
  • My house is in foreclosure, what financial damage will happen to me during and after the foreclosure of my home? Will I be responsible for the difference if the foreclosure is less than the mortgage on the home? Can this foreclosure effect my license as a LCDC counselor granted through the State of Texas?
  • what assistance is available to me I was 12 months behind caught up on six in September and they started foreclosure this month sell date is Feb of 2015 I thought they were working with me and no notice foreclosure.? my husband was on unemployment for over 4 years and recently is now working and we are able to catch up and stay on track.

STORIES

LegalLEARN

FIND LEGAL HELP

  • Please select your county of residence below.

    County:
     

OTHER LEGAL RESOURCES

  • State Bar of Arizona
    www.azbar.org
  • Maricopa County Bar
    www.maricopabar.org
    Referral number 602-257-4434
  • Pima County Bar
    www.pimacountybar.org
    Referral number 520-623-4625
  • National Domestic Violence Hotline
    800-799-7233
  • Bankruptcy Court Self Help Center
    866-553-0893
  • Certified Legal Document Preparer Program
    Link

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