Michigan Foreclosure Assistance Lawyer
Livonia Attorney: Bankruptcy & Stopping Foreclosure
Foreclosure is currently at the forefront of many people's minds. While most people facing foreclosure wish to keep their homes, there are others who are willing to accept a financial loss and move forward. Whatever your circumstances, the law firm of Charles J. Schneider, P.C., in Livonia, Michigan, can help.
Our attorneys have worked with individuals and families facing financial crises for more than 30 years. We understand that times are tough and offer a free initial consultation to discuss your debt relief and foreclosure options. Contact us online or at 734-237-1523 to schedule an appointment with a Michigan foreclosure assistance attorney.
Stopping Foreclosure — Saving Your Home — Chapter 13 Bankruptcy
Falling behind on your mortgage payments could ultimately lead your mortgage lender to initiate foreclosure proceedings. If you want to prevent losing your home, filing for Chapter 13 bankruptcy may be your best option.
As soon as a bankruptcy case is filed, the bankruptcy court will issue an order that prohibits your mortgage lender from following through with its foreclosure or short sale. While this order is meant to take effect immediately, it sometimes takes up to two weeks for the notice to reach your lender. Our firm will expedite this process by sending notice to your mortgage lender as soon as your bankruptcy case is filed.
How Can Filing For Chapter 13 Bankruptcy Help?
Only Chapter 13 bankruptcy provides you with the opportunity to compel your mortgage company to accept a repayment plan. The repayment plan includes making the current monthly mortgage payment and providing a cure for delinquent debt (mortgage arrears) over a reasonable period of time. Payment is made to the bankruptcy trustee and he or she makes your mortgage payments for you.
You may also be able to use Chapter 13 bankruptcy to strip a second mortgage from your home, which may make it easier to make the payments on the original mortgage. "Lien-stripping," as it is known, is a complex aspect of Chapter 13 bankruptcy, and you should consult an experienced bankruptcy lawyer before making any decisions.
The Short Sale Solution: Not As Straightforward As It May Seem
A lot of people are taking about short sales these days. A short sale is a transaction where your mortgage bank agrees that you can sell the house for less than the mortgage amount and the bank will accept the sale price as full payment of the mortgage.
There are hidden traps in the short sale process, however, and it may not be the best solution to your financial problems.
- Did you know that the bank can still come after you for the balance of the debt on your mortgage after a short sale unless you negotiate a novation, in which the bank waives its right to seek payment of the remaining debt?
- Did you know that you will probably have to declare the forgiven debt as income and pay taxes on it? For example, if your mortgage was $100,000 and you short sell your house for $50,000, the bank will send you a 1099 form for $50,000, which you must report as income to the IRS.
Forgiven debt is never treated as taxable income in a bankruptcy proceeding. Furthermore, once debt is forgiven through bankruptcy, the forgiveness is total and the creditor may never come after you for debt payment again.
Chapter 7 Bankruptcy — Walking Away From It All
If you are facing foreclosure and decide to simply let your house go, it is extremely important to make certain your rights are protected and any outstanding legal matters are properly handled. Our experienced and highly skilled lawyers fully understand the ramifications of foreclosure and will take the time to explain how it may affect your situation.
Contact the Law Firm of Charles J. Schneider, P.C.
If you have questions regarding foreclosure or short sales, contact our office online or call 734-237-1523 to schedule a free initial consultation. We will listen to your situation and provide you with options in line with your goals.