Foreclosure

Foreclosure is the process whereby a mortgage holder "repossesses" the collateral for their loan. If you borrowed money to purchase your home, or took out a second mortgage, you gave the lender a security interest in your house or land. This became the collateral for the loan. When the loan goes into default (usually by lack of payment) the lender forecloses, or eliminates your ownership interest in the property. They do this so that they can sell the property to someone else and recover some or all of what is owed on the loan.

The most common type of security agreement that secures loans secured by real property in the State of Utah. is a Deed of Trust. Generally, to foreclose on a deed of trust, the creditor says that there is some type of default. The most common type of default is being behind in the payments on the loan. Once the loan is in default, the creditor records a Notice of Default with the county recorder in the county where the property is located. A copy of the Notice of Default is sent to the owners of the property by registered mail, return receipt requested. (That green card the letter carrier has you sign.) The owner of the property now has 90 days to cure the default (called the Redemption Period). If the default is not cured within the 90 day redemption period, the lender sets a date to sell the property. After setting the sale date, the lender notices the property for sale. The creditor posts a notice of sale on the property and advertises the property once per week for at least 3 weeks. On the sale date, a representative for the lender sells the property on the court-house steps (really).

Now the good news. Generally, a chapter 7 or 13 can STOP the foreclosure process at any time during the foreclosure process. As long as the chapter 7 or 13 is filed before the sale of the property, the foreclosure cannot proceed without permission from the bankruptcy court. Further, a chapter 13 will give you time to bring the payments currents, while making your regular, ongoing loan payments. The bottom line, a chapter 13 will help you keep your home, even if the lender is foreclosing.

Call us today for your appointment for your free initial consultation. We will review your situation in detail and show you just how a chapter 13 can help you keep your home.