According to a Lending Tree survey from 2022, many people across the United States are behind on their mortgage payments and could be facing foreclosure, thanks to inflation and high home prices. In fact, the survey found that as many as one million adults in the U.S. were afraid they might lose their homes to foreclosure within the next two months. Almost four percent of homeowners admitted to being behind on their mortgage payments and in fear of losing their homes.
Among the homeowners who were behind on their mortgages, about 20 percent said they expected to be forced to leave their homes as a result of foreclosure. The rate of foreclosure has increased since 2021 thanks to the end of the pandemic-era foreclosure moratoriums. Those who are facing such an untenable situation need a way to stop foreclosure proceedings and remain in their home.
Our homes are where we raise our families and make memories, so they are much more than simply a roof over our heads—although that is an important consideration, particularly if you have a family. Facing foreclosure can be daunting and overwhelming. Remember—you are not alone. The highly experienced Simon Fitzgerald attorneys are here to guide you, providing expert navigation through this challenging situation. We will help you explore every available avenue to stop foreclosure proceedings on your home.
Ways to Stop Foreclosure
There are several ways you may be able to stop foreclosure proceedings on your home, but time is of the essence. The ways you may be able to stop foreclosure include:
- Having your loan reinstated: This involves catching up on all missed payments, including late fees and legal costs, in one lump sum to bring your mortgage current. While Louisiana law doesn’t guarantee this right, your mortgage agreement may allow it, so it’s important to review your loan documents carefully.
- Redemption of your property before the sale: This means paying the full remaining balance of your mortgage along with any fees and costs before the foreclosure sale takes place. Though rarely feasible for most homeowners, this option permanently stops the foreclosure and allows you to retain ownership of your home.
- Loan modification/Repayment Plan: This could involve lowering the interest rate, extending the term of the loan, adding missed payments to the loan balance, or even forgiving a part of your mortgage debt. These options can make your payments more manageable and allow you to keep your home.
- Short sale or deed in lieu of foreclosure: where you sell your home for less than what you owe on your mortgage with your lender’s approval. This can help you avoid foreclosure and the associated negative impact on your credit score. Alternatively, a deed in lieu of foreclosure allows you to voluntarily transfer the title of your property to your lender in exchange for the cancellation of your mortgage debt.
- Filing for bankruptcy: Filing for Chapter 7 or Chapter 13 bankruptcy triggers an automatic stay, which halts foreclosure proceedings immediately.
While Louisiana law does not give you the right to have your loan reinstated, your loan paperwork could allow for reinstatement, so check your mortgage documents carefully. When you choose the right of redemption, you must pay your loan in full (along with fees associated with the foreclosure). This is not actually a viable option for most homeowners facing foreclosure, since the reason they are facing foreclosure is that they could not afford to make their regular monthly payments. If a foreclosure sale is pending, bankruptcy may be the best option to stop the sale immediately.
Bankruptcy: A Beacon of Hope in Troubled Times
Filing for bankruptcy can serve as a powerful lifeline during these challenging times. When you file for bankruptcy, an “automatic stay” is enacted. The automatic stay immediately halts most creditors, including your mortgage lender, from continuing collection activities. This means that foreclosure is stopped in its tracks, providing you with the breathing space to regroup and plan your next steps. Under Chapter 13, you can restructure your debts into a manageable repayment plan, which can include arrears on your mortgage or car loan. Bankruptcy isn’t just about eradicating debt. It’s about allowing you to regain control, get back on your feet, and start anew.
Preventing Foreclosure with Chapter 7 vs. Chapter 13 Bankruptcy: Navigating Your Path Forward
Chapter 7 and Chapter 13 bankruptcy can offer relief, but in different ways. Chapter 7 bankruptcy can temporarily stop foreclosure, but if you are unable to catch up on your mortgage payments, the foreclosure may eventually resume. On the other hand, Chapter 13 bankruptcy allows you to pay off your overdue payments over an extended period. If you can adhere to the terms of your repayment plan, you’ll avoid foreclosure and retain your home. Understanding the differences and benefits of each option is crucial to making an informed decision that best suits your situation.
Chapter 7 Bankruptcy: The automatic stay in Chapter 7 bankruptcy temporarily halts foreclosure proceedings, providing you with immediate relief. However, it does not provide a long‑term solution to catch up on missed mortgage payments. Many people hope their lender will renegotiate their mortgage and stop foreclosure proceedings once they file for Chapter 7 bankruptcy. Unfortunately, the lender is under no obligation to do so, and may even refuse to talk to you after you have filed for Chapter 7 bankruptcy. What Chapter 7 can do is allow you time to arrange other housing during the period the automatic stay is in place. If your home is sold under Chapter 7, you are entitled to receive cash equal to the state or federal homestead exemption, however, those funds would be used to pay priority debts.
Chapter 13 Bankruptcy: If you want to stop foreclosure proceedings and keep your home, Chapter 13 bankruptcy may be a better option. Under your Chapter 13 three or five-year repayment plan, you will propose how you will catch up on your mortgage arrears. This allows you to prevent foreclosure and maintain your home by making regular mortgage payments and fulfilling the terms of the repayment plan. Once your plan is approved by the court, the lender cannot foreclose unless you stop making the payments detailed in your repayment plan. Remember—filing for bankruptcy, whether Chapter 7 or Chapter 13, will only stop any foreclosure actions if the actual foreclosure sale has not occurred.
Are There Any Exceptions to the Foreclosure Prevention Measures Offered by Bankruptcy in Louisiana?
While bankruptcy provides powerful tools to prevent foreclosure, there are certain exceptions and limitations to consider.
- Repeat Foreclosure Filings: If you have previously filed for bankruptcy and had a foreclosure case dismissed within the last year, the automatic stay may be limited in duration or may not go into effect automatically. Additional steps may be required to extend the stay or seek other forms of foreclosure prevention.
- Secured Debts and Collateral: Bankruptcy does not eliminate your obligation to pay secured debts. If you are delinquent on mortgage payments or other secured debts, bankruptcy can provide temporary relief through the automatic stay, but you will need to work out a plan to address the delinquency and continue making timely payments to avoid foreclosure.
How To Choose the Best Louisiana Bankruptcy Lawyer
Choosing the best Louisiana bankruptcy lawyer is an important step that can dictate whether the outcome of your bankruptcy will be successful. As Louisiana’s oldest bankruptcy firm (founded in 1907), we have primarily practiced bankruptcy for our Louisiana residents for the past five decades. With more than 25,000 bankruptcy cases filed over those years, we believe our experience and results speak for themselves.
Our attorneys routinely devote more time to each bankruptcy case than most other bankruptcy lawyers, offering free in-person, phone, and virtual initial consultations. Our ultimate goal is to present solutions to our clients that can help them get a fresh financial start and stop foreclosure, when applicable. We also strive to come up with solutions that help our clients not miss work or travel long distances to speak to our attorneys. Since our firm began, we have consistently treated people from all backgrounds and all walks of life as equals, always with respect and dignity.
Understanding these are difficult times, and that sharing the details concerning your finances with a stranger can be embarrassing, we strive to set you at ease and break down complex legal concepts into easy-to-understand terms. In the end, when you choose Simon Fitzgerald, you have chosen a firm that provides everyday people with real relief from situations they believed were insurmountable.
Meet Karen and James: Finding Financial Stability Through Bankruptcy – A Stopping Home Foreclosure Case Illustration
Karen and James, a loving couple from Lafayette, were living their dream in a beautiful home where they planned to raise their family. Unfortunately, life took an unexpected turn when James lost his job, and Karen’s hours were reduced at work. The financial strain began to mount, and they fell behind on their mortgage payments.
Fear and uncertainty clouded their minds as they received a foreclosure notice from their lender. The thought of losing their home, where they had celebrated birthdays, anniversaries, and countless everyday joys, was unbearable.
Desperate for help, Karen and James reached out to Simon Fitzgerald LLC. Our experienced attorneys immediately assessed their situation and explained available options, including filing for Chapter 13 bankruptcy. By doing so, they could halt the foreclosure process and restructure their debts, allowing them to catch up on their overdue mortgage payments over time.
With our guidance, Karen and James filed for Chapter 13 bankruptcy, enacting an automatic stay to stop the foreclosure. The couple breathed again, knowing they had the time and support to regain control of their financial lives.
Through careful planning and adherence to their Chapter 13 repayment plan, Karen and James avoided foreclosure and retained their beloved home. They were empowered to rebuild their financial stability while preserving the place where their family’s memories were made.
The journey was not without its challenges, but with Simon Fitzgerald LLC’s compassionate and expert guidance, Karen and James turned a potential tragedy into a triumph of resilience and determination.
If you, too, are facing the threat of foreclosure, don’t navigate this challenging time alone. Contact our experienced team of bankruptcy attorneys today for a consultation. Let us assist you in forging a new path, empowering you to reclaim your financial destiny.
Applicable Louisiana Foreclosure Laws
Louisiana foreclosure laws can be found in the Revised Statutes, Section 45:1138. You have certain rights under Louisiana foreclosure laws, including the right to receive a “breach letter” before the foreclosure. You also may have the right to:
- Apply for loss mitigation
- Receive notice of a pending foreclosure
- Entitlement to special protections if you are in the military
- Pay your mortgage in full to prevent a foreclosure sale
- Receive excess money following a foreclosure sale
The state of Louisiana does not allow a redemption period for homeowners, which means you must act quickly to stop the foreclosure, which can take from 60 to 180 days. Once the writ of seizure and sale is ordered, you are out of remedies to save your home. After you fall behind in payments, when the foreclosure process begins is known as the pre-foreclosure stage.
While your loan servicer can charge you many different fees during this time, federal law requires the mortgage holder to let you know how to avoid foreclosure and to send you a breach letter. Federal law requires that the mortgage holder give you until you are 120 days past due on your payments to begin foreclosure proceedings, however, there are exceptions. This 120-day period allows homeowners to submit a loss mitigation application, which is essentially the process whereby borrowers and mortgage servicers work together to create a plan to avoid foreclosure.
Understanding Foreclosure: A Deep Dive for Louisiana Homeowners
Foreclosure is a legal process lenders initiate to reclaim property when a borrower fails to meet their mortgage payment obligations. It’s a term that can send chills down your spine, but it’s crucial to remember that foreclosure doesn’t occur overnight. It’s a process that unfolds over time, and you have options and rights during this period.
In Louisiana, foreclosures can occur both in and out of court, but the most common type is the “executory proceeding,” which is relatively swift. This process can be intimidating, but knowledge is power. Understanding your rights and how to stop foreclosure can significantly impact your ability to navigate this challenging time. Learn more on avoiding foreclosure in Louisiana,
An executory proceeding goes through court but is a faster process. After the mortgage holder files a petition and supporting evidence, the court may order the property seized and sold. While this seems unfair, you likely consented to this type of foreclosure at the time you signed all your mortgage documents. The exact language may have contained the words “confession of judgment,” which allows your mortgage holder to avoid a lengthy process.
The lender must only file a foreclosure petition with supporting documentation, and your home could be seized and sold. Regardless of the swiftness of the process, the initial sheriff’s sale cannot be scheduled sooner than 60 days from the date the foreclosure documents were signed by the court. You will need an experienced attorney’s assistance to appeal the foreclosure, apply for an injunction to stop the foreclosure or choose another avenue to stop foreclosure proceedings and the sale of your home.
A judicial foreclosure begins when the mortgage holder files a civil lawsuit against you for defaulting on your mortgage. If you fail to file an answer to this civil lawsuit within the allowable time, the court may allow a foreclosure sale by default. If you choose to defend the foreclosure, the litigation process begins. Your mortgage holder may ask the court for a summary judgment. If the court grants such a judgment, your home will be sold at auction.
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Stopping home foreclosure can be a complex process. Fortunately, there are local programs and resources in place in cities like Shreveport, Monroe, Alexandria, Lafayette, and Lake Charles to assist homeowners facing foreclosure. These programs often offer valuable resources and services, such as foreclosure prevention counseling, financial education, and loan modification assistance. Local housing counseling agencies and nonprofit organizations may also provide support tailored to the specific needs of homeowners in these communities. By seeking guidance from an experienced attorney familiar with the local dynamics, you can gain access to these resources and receive the necessary assistance to navigate the foreclosure process successfully.
At Simon Fitzgerald LLC, we have an extensive network of connections with local organizations and agencies in these cities. Our team can help you identify and connect with the appropriate resources available to homeowners facing foreclosure. We understand the importance of personalized support and will work closely with you to ensure that you have the necessary information and assistance to explore all potential options.
- Louisiana Housing Corporation ‑ Foreclosure Prevention
- Bankruptcy Case Evaluation Tool
- Can bankruptcy stop a repossession in Louisiana?
- What are my options for avoiding foreclosure in cities like Shreveport, Monroe, Alexandria, Lafayette, or Lake Charles?
Why Choose Simon Fitzgerald LLC to Navigate Foreclosure Challenges?
At Simon Fitzgerald LLC, we’ve established a legacy of helping clients achieve a fresh financial start. Our experienced attorneys can determine if your tax debts are dischargeable in bankruptcy and help you defer those tax obligations to get the IRS or Louisiana Department of Revenue off your back. With our legacy guiding us, we’re dedicated to providing clear, straightforward advice and guidance.
Everyone deserves a fresh financial start; we’re here to help you achieve that. Choose us to navigate your financial issues and experience the difference our legacy can make. Ready to take the first step towards a fresh financial start? Contact us today to discuss your options. If you want to understand more about bankruptcy, our e-book is a great place to start. Remember, if you’re stuck with a tricky question, our bankruptcy experts are just a click away. If you’ve got a case and need guidance, schedule your free consultation today and let our experienced team guide you.
