Foreclosure and Bankruptcy in New York City

If you live in NYC filing for bankruptcy can stall or prevent foreclosure of your home allowing you to mitigate the loss or save your property.  Millions of people in America are still faced with underwater mortgages and are struggling to pay for homes that lost value with the downturn in the economy.  The emotional attachment that many people feel for their home is tremendous.  It is unlike any other asset, and the prospect of losing the family home to a creditor can be overwhelming.  But sometimes paying for a home worth less than its mortgage can be hard to justify despite the good memories and deep emotional connections one might have.  Hanging onto a home with a bad loan can ruin a consumer’s personal finances.  As sad is it may be, sometimes the best thing to do is to declare bankruptcy and surrender the home to creditors.  In other cases bankruptcy can save a home if it is in a person’s best interests to do so.

The moment any bankruptcy is filed any collection attempts from creditors, including mortgage lenders looking to foreclose, are stopped by the “automatic stay” provision of the Bankruptcy Code.  You will get some immediate and temporary relief from the foreclosure process, but in order to stay in your home you will need to come current on your past due mortgage payments through a repayment plan and will also need to continue making your regular payment.  This will buy you some valuable time and may help you in the long run by eliminating other toxic debts, but in the end you will be on the hook for what you owe the bank on at least your primary mortgage.  Saving a home through bankruptcy depends on your specific financial situation and should be discussed with an attorney sooner rather than later.

What usually happens is people come to a bankruptcy attorney too late.  After scrimping and saving and doing everything possible to make their monthly mortgage payments they finally reach a breaking point where they simply have no more money.  Hoping against hope that the next month will be better, and that you’ll be able to catch up if you just keep cutting back has gotten a lot of my clients into even worse financial trouble.  Had they come to us six months or a year sooner we may have been able to do something to save their home or at least the money that was thrown down a black hole in trying to save it.

It’s true that you might be able to modify a mortgage with one of the many new programs available, but they are still unproven and sure to take a very long time.  While you wait for approval of your modification which could take months or even years you are still throwing money down the tubes and destroying your credit.  You might not even be able to afford the new payment they offer, and if you have a second mortgage, well good luck.  In bankruptcy on the other hand you can keep your home after you file if it makes sense to do so.  You will also get immediate relief from your other toxic debts so you can start rebuilding your credit now, not in a couple of years after you have spent your last dime in the hopes your mortgage will be modified.

If you have received a looming foreclosure notice you should speak with a consumer debt or bankruptcy attorney right away.  It may not be in your best interests to file, but even if bankruptcy is not the best option for you a qualified bankruptcy attorney will be able to help save your home, or mitigate the damage in losing it.  The last thing you need is to ignore the problem, lose the home, and then get sued 10 years later.  Get your options now in a free consultation to avoid worse problems in the future.  If you live in New York and are worried about foreclosure or have been suffering to pay your mortgage please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free foreclosure relief consultation.

This article is intended for educational purposes only.  By reading this no attorney