How to Stop a Foreclosure Sale
If it were just as simple as being able to pay the overdue amount
, then this would be a very short commentary. But clearly anyone asking the question, how to stop a foreclosure, sale doesn't have, "getting caught up" as an option.
But we start there for a very important reason. It's all about your lender wanting to get what's owed to them. And since you haven't been able to fulfill your part of the contract (most likely through no fault of your own) they are taking extreme measures. This is important because when you know where your adversary is coming from, it makes establishing your position a little easier.
Here's a little bit of common wisdom. No one parts with money they don't have to. And that includes your lender who is protected by a recorded legal document, and an army of lawyers who use their expertise to protect the rights of the lender. When you look at it that way, it is easy to see why so many homeowners have struggled and failed to come to any common ground with their lender. Furthermore, it is no surprise that this year has seen another record number of foreclosures, and there is no end in sight!
Most homeowners have tried in good faith to talk with their lender. They have been urged by the National and State elected officials to apply for one of the government loan modification programs, and to talk directly with their lender. So they did. And given the context we presented in the beginning, is it any wonder why outgunned homeowners are having little success? As little as 5% of homeowners who qualify are getting loan modifications according to one study. Is it any wonder why homeowners are facing foreclosure with few options remaining, and no one seems to care?
If a homeowner is just a few days before a foreclosure sale, then typically the lender doesn't even want to talk with you. I've know plenty of homeowners who have tried. At that point, the lenders just blow you off and say that it is too close to the foreclosure to do anything. Of course all they would have to do is throw a switch and call off the sale, but they don't. They don't care about you keeping your home. They care about being profitable, and when they decide to take your house, you can be assured they are not taking into account how it is going to affect you and your family. And at some point in their decision process, an analysis has concluded that they are better off without you in your home.
So coming back to the question; how to stop a foreclosure sale, what options are there? One option is filing a chapter 13 bankruptcy, which can stop a foreclosure sale dead in its tracks. "Once you file your Chapter 13 bankruptcy petition, the "automatic stay" stops foreclosure proceedings until your repayment plan is approved (or rejected) by the court " (source: Nolo Press)
Here's the short answer on whether it is a good or bad thing to file a chapter 13 bankruptcy. If only a few days are left before the bank has scheduled a sale, you have tried talking with them and it goes nowhere, then you still have a weapon.
If nothing matters more than stopping the sale, then you can file the initial documents of a chapter 13 bankruptcy. You don't have to do the whole thing today. And if you don't have the money today for an attorney (typically around $2000), you can still do the initial filing yourself today. Because if you don't get your sale stopped today, you won't need an attorney tomorrow when you may have found the funds.
But isn't a bankruptcy a bad thing? The answer is another question, "Worse than losing your home?" You are in crisis mode, and you have to put out the immediate fire so you can live to fight another day. Just filing a chapter 13 bankruptcy may stop your sale immediately, but it won't keep it stopped. You've got a lot of battles ahead of you. But which is the preferred path? More battles or packing?
If you file a bankruptcy, one thing is certain you won't be alone. This year there are a record number of bankruptcies. A probable cause is that lenders have backed homeowners into a corner, and it is one of their last maneuvers available to them. The bad economy has a lot to do with it as well.
If filing a chapter 13 is how to stop a foreclosure sale, then all that matters is using the tools available to you to get the job done. You may want to hire an attorney to file for you, or file the initial part on your own today, (see
http://www.HowToSaveMyHouseFromForeclosure.org for a step by step description of how someone did it on their own) and then take a few days to carefully choose an attorney and to raise the funds after the storm has passed.
How to Stop a Foreclosure Sale
By: mattsilverman
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