How To Stop Seattle Bank Foreclosures

By Author: Resolve Legal
Total Articles: 7
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Having trouble keeping current on your home mortgage payments? Worried you may lose the home because the mortgage holder will foreclose?

Many people have a similar problem, and often the reason is an adjustable rate mortgage. First American CoreLogic, a respected research firm, has published a study about these mortgages. It found that 1.1 million additional home foreclosures are expected between 2007 and 2013. Many Seattle bank foreclosures will involve adjustable-rate mortgages. Such mortgages have favorable introductory rates. But eventually, they reset to higher rates, which is what causes problems.

Many residents in Seattle and the surrounding area have only a small amount of equity in their automobiles. But they do have equity, sometimes substantial equity, in their homes. Seattle bank foreclosures will result in the loss of both this equity and their homes.

Homeowners faced with Seattle bank foreclosures should hire an experienced bankruptcy lawyer. Plus, homeowners must understand that filing for bankruptcy can prevent Seattle bank foreclosures, provided the filing is made under Chapter 13. Its ...
... provisions are expressly designed for people with regular income that desire to meet their obligations, but can't because of current financial stress. Chapter 13 allows homeowners time to catch up with past due payments. Just as important, Chapter 13 is a tool for avoiding Seattle bank foreclosures.

To stop Seattle bank foreclosures using Chapter 13's provisions, homeowners must file for bankruptcy before foreclosure occurs and a bank sells their home. After the filing, a financial plan is created. It provides for paying past due mortgage obligations as well as any other secured debts, including car loans. A Chapter 13 plan lasts for three to five years. The plan permits a bankrupt to keep enough income to meet living expenses, though the way the law calculates living expenses is less generous than the calculation debtors would make. The income that remains after living expenses are deducted is paid to a trustee. The trustee then turns around and pays creditors with those funds. In other words, under Chapter 13 debtors use future income to repay past debts and avoid Seattle bank foreclosures. Compare this result with a Chapter 7 bankruptcy. Frequently called a liquidation bankruptcy, under Chapter 7 a bankrupt's assets that aren't exempt from bankruptcy are assembled and sold, with the proceeds going to creditors.

To prevent Seattle bank foreclosures, homeowners must make all payments specified in their Chapter 13 plan. If they don't, a lender can ask the bankruptcy court to revoke the protection against foreclosure provided under Chapter 13. If a court agrees to do this, Seattle bank foreclosures will no longer be prevented.

For homeowners facing Seattle bank foreclosures, Chapter 13 is an excellent vehicle.

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