Stop Foreclosures in Seattle with Consumer Bankruptcy
Mediation: If you come to us soon enough, we may be able to stop your foreclosure in Seattle using Washington’s Foreclosure Fairness Act. The FFA provides for mandatory mediation intended to help you get a mortgage modification before your lender can foreclose.
Bankruptcy: Filing for bankruptcy can save your home from foreclosure and protect up to $125,000 of equity in your home. The two most common types of bankruptcy consumers file to protect their home from foreclosure are called Chapter 13 and Chapter 7. By filing for bankruptcy, you trigger the Automatic Stay. This is an automatic court order that immediately blocks foreclosures and other collection actions from happening. The very act of filing your bankruptcy case creates a stay.
Chapter 13: Filing a Chapter 13 bankruptcy can stop a Seattle foreclosure sale from taking place and give you an opportunity to force a payment plan that allows you to catch up on the amount you are behind on your mortgage payments over a period of 3 to 5 years, while keeping current on future mortgage payments. If you cannot afford this type of plan but still have a steady income, you may be able to offer a plan that just requires you to keep making your current mortgage payment while you work with the mortgage lender for a modification. We may also be able to use mediation under Washington’s Foreclosure Fairness Act to get your mortgage modified.
Outside of Chapter 13, mortgage companies seldom let you have more than a few months to catch up on missed payments, an impossible task if you are not expecting to receive some windfall of money. During the entire repayment time that a Chapter 13 allows for, you are protected from foreclosure and most other collection efforts, as long as you play by the rules laid out in your Plan. If you play by those rules, you should be completely current on your home when you finish your case.
Chapter 7: Filing a Chapter 7 bankruptcy stops a foreclosure sale from continuing and can give you a few months to work out a modification of your mortgage or catch up on your mortgage payments. Often, the discharge of your other debts in bankruptcy is just what the mortgage lender needs to approve you for a modification. However, you may still need Chapter 13 bankruptcy if your mortgage default isn’t quickly resolved. Contact us today to learn more about how filing for bankruptcy can save your home and give you the fresh start you need.
Chapter 11: If you have one or multiple rental properties that are facing foreclosure in Seattle, Chapter 11 may offer you the ability to reduce the balance owed to the value of the property, rewrite the mortgages on your investment properties to new 30- or 40-year terms, and reduce the interest rate based on the prime rate, plus a risk factor. The majority of our Chapter 11 clients experience substantial reductions of principal and/or interest rates. Unlike a Chapter 13, a Chapter 11 may not require you to catch up on the payments you have missed. Instead, you start over with a new loan, so you are current as soon as your Chapter 11 plan is approved by the court.