Foreclosure Help: Colorado
If your home is in foreclosure and you want to keep it, there are several possible remedies:
Sometimes it is possible to do a workout agreement or a refinance with the mortgage lender. Be aware however, not to trust the mortgage company very far. What we usually see happen is that the lender will ask for a good faith payment on the arrearage, usually at least $2500. and tell you that will “consider” a workout agreement. Time goes by and they want more and more documents or they tell you they lost the paperwork that you sent them. They stall you until just before the scheduled foreclosure date and then they tell you that they considered the workout and decided not to do it. What the lender gets is your $2500 and your house in a market with rising home prices. What you get is a loss of all the equity in your house and the opportunity to live somewhere else.
Chapter 7 Bankruptcy has no provisions for catching up on mortgage arrearages so Chapter 7 is of little use. Filing a Chapter 7 does stop the foreclosure sale if it is filed just before the foreclosure sale date. When a bankruptcy is filed, the Court issues an order “staying” or stopping all collection activities or continuing any court cases including foreclosure proceedings. However, the mortgage lender is able to get the stay terminated as to them is six weeks or so and then the foreclosures proceeds. Unless you win the lottery, stalling the foreclosure is of little use since the underlying problem of catching up on your house payments still remains.
Chapter 13 Bankruptcy allows borrowers to stop the foreclosure, keep the home and spread the back payments out over the length of the Bankruptcy from three to five years. Be aware however, that the Chapter 13 only helps you catch up on back payments, you still must pay all the regular payments. If you fall behind at any point during your Chapter 13, the mortgage lender can get the court to dismiss your case. If you finish your Chapter 13 and are behind on mortgage payments coming due during your Chapter 13, the Court will not grant you a discharge and you will still owe all the same debts. Other Chapter 13 benefits include deferring student loans, paying priority taxes without further penalty, sometimes keeping the car and lowering the payments, and in some cases getting rid of second and third mortgages. Unsecured creditors such as credit cards or medical bills often receive very little from you Chapter 13 but are still wiped.
