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 received a notice of auction and id like to file a form action rule 65 arizona civil procedure,seems like no one can tell me me where to file.thank you
  • I have a balloon payment due this November. And I believe my house isn't even worth what I owe at this point. Is someone willing to lend in these cases? Should I be shopping for a fefinance this early? I know we are negative, but we love our house and know it will rebound one day, just need to get through this hard time. Any idea's? Thanks, Tomm
  • Is a single unit in a large condominium complex treated the same as a single family residence under the AZ anti-deficiency statutes?
  • Can a lender sue for a deficiancy balance(first mortgage only)on a townhouse or condominium? Does AZ33-814 prohibit the recovery of any balance due after trust property is sold pursuant to the trustee's power of sale, or the trust deed is foreclosed in the manner provided by law for the foreclosure of mortgages on real property.
  • We are currently renting a home that is being foreclosed on. A realtor is telling me to allow him to put a safe lock on the door and show the home. What are my rights? He claims to work for the trustee.
  • In the dot com recession, my IT job disappeared. I had to refinance my home. My son signed the new mortgage because I needed his income to qualify. I have since wished he could be removed but couldn't refi because property values fell. Now my job has once again disappeared and I am facing foreclosure. I am applying for assistance thru SaveYourHome. My mortgage counselor tells me that I would easily qualify except for the co-signer. In the past 2 yrs, my son has gone thru a BK & lay-off. He's been at his new job 9 months makes $13 per hour. I've heard about Quit Claim deeds. Can he be removed?
  • 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
  • Can my lanlord come after me for the money if i break my lease early, and the house is in foreclosure?
  • Can the lender force foreclosure on my home when my ex-spouse got a 2nd mortgage in his name showing him as the borrower while we were married on this home And now I own this property from the divorce?
  • How do I find out if there is a sale date for my home that is in foreclosure?

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

ORGANIZATIONS