The Foreclosure Process and How Bankruptcy May Help
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The Foreclosure Process and How Bankruptcy May Help

Millions of Americans are currently dealing with the unpleasant prospect of losing their home to foreclosure. If you're one of them, you're no doubt worried and stressed out about a variety of things – and if you aren't familiar with how the foreclosure process works, your stress is likely compounded.

Bankruptcy laws are designed to save homes from foreclosure and get homeowners back on track. Bankruptcy is a federally created process that has helped millions of people.

To speak with an attorney right now about how filing bankruptcy might help your foreclosure situation, simply fill out the below form now.

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A Look at the Mortgage Foreclosure Process

While the specific details depend on where you live, the foreclosure process follows the same basic progression throughout the country. Here's a look:

  • You miss a payment: In some ways, the foreclosure process begins when you miss your first mortgage payment. At this time, your lender will likely not charge any fines, but if you don’t make your payment within 30 days, it probably will.
  • You enter "default": If you don't make your late payment within 30 days, your mortgage is said to be in "default," and your lender may start moving the wheels of foreclosure. Depending on your lender, you may be offered a chance to catch up in installments, but if you cannot make such payments, expect foreclosure proceedings to begin.
  • You get a letter: Between the 30 and 45 day mark, your lender will likely send you a letter of "breach" or "demand," which indicates that you have failed to meet the terms of the mortgage agreement (by paying on time). You may have up to 30 days to repay the delinquent amount.
  • The lender files a notice of foreclosure: Generally around 90 days from your first missed payment, your lender may file a notice of foreclosure with the court, publish this notice in the newspaper, and/or move your loan to its loss mitigation department. During this 90-day period, you will likely receive regular calls from your mortgage collectors asking about what you owe.
  • You get a notice of default: Commonly within two to three months of your first missed payment, your lender will send you a notice of default that explains your house will go into foreclosure unless you catch up on payments within a set amount of time.

Foreclosure, Loan Modifications and Chapter 13 Bankruptcy

One question that many struggling homeowners have is when to take action of their own if they know they won't be able to make mortgage payments in the near future. Here are a couple general considerations, but remember that this is not legal advice, which can be obtained from a lawyer in your area. You should consider any actions carefully before taking them.

  • Contact your lender ASAP: Most homeowners are either embarrassed about their inability to pay or simply uninformed about the best route to ask for help. But many insiders recommend contacting your lender as soon as you suspect you'll have trouble making payments and asking about loan modifications.
  • Consider Chapter 13 bankruptcy: If you don't contact your lender in time or if your lender is unwilling or unable to modify the terms of your home loan, you filing for may want to consider Chapter 13 bankruptcy protection. This type of personal bankruptcy may stave off foreclosure for three to five years, which may allow you either to catch up on mortgage payments or make alternate living arrangements without being rushed.

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