San Diego Foreclosure – How Bankruptcy can Save Your Home
If you are facing the loss of your home, you should know that bankruptcy can offer you a government-approved way to stop foreclosure, save your home equity, end wage garnishment for credit card and medical bills, and in most cases, wipe out the burden of high-interest second mortgages, third mortgages, and home equity loans.
If you are wondering if bankruptcy could save your home and protect your family from the hardship of foreclosure, please call us at Steigerwalt Law Firm for your free consultation. We take appointments on short notice. We are not judgmental, and you will be treated with kindness and respect at all times.
San Diego Chapter 13 Bankruptcy: Save Your Home from Foreclosure
Chapter 13 bankruptcy is a debt repayment plan that reduces many debts and gives you 3-5 years to pay off all your back debts. It offers tremendous benefits to homeowners who have home equity they need to protect but who have fallen behind on their mortgage payments ...Learn More
1. Lien Stripping
In most cases, the court will "lien strip" all second and third mortgages and home equity loans. This converts these loans to "unsecured debts" that are no longer attached to your home.
Most Chapter 13 bankruptcy repayment plans require you to pay only a very small percent of your total unsecured debts, which will include "lien stripped" second and third mortgages and home equity loans, credit card bills, payday loans, medical bills, and many other unpaid bills. The balance remaining on your total unsecured debts will be wiped out when you complete your payment plan and receive a bankruptcy discharge.
2. Money freed up for mortgage payments.
Once you have a payment plan for your total unsecured debts, it will free up money for you to resume paying your first mortgage. You will typically be given 3-5 years to make up missed payments on your first mortgage.
San Diego Chapter 7 Bankruptcy: Limited Help for Home Foreclosure
Chapter 7 bankruptcy lets you stop creditor harrassment and get rid of most debts and bills in about 3 to 6 months. You will get a fresh start on your financial future and can begin rebuilding your credit ...Learn More
1. Foreclosure notice already received.
Chapter 7 will temporarily stop a home foreclosure that is already in progress, typically for around 30 days. Your lender(s) will then ask the court to allow the foreclosure to continue. The court will grant this request unless your attorney can prove that you were timely with all your payments, or you were the victim of some sort of lender fraud (which is very rare). Once the court gives its "OK," the foreclosure starts up again at whatever point it stopped when you filed bankruptcy.
2. Foreclosure not yet started.
If you have kept up with your payments and have not received a notice of foreclosure, Chapter 7 offers more hope. Chapter 7, a "straight" bankruptcy, will wipe out all of your unsecured debt (such as payday loans and credit card loans) in 3-6 months, which may free up enough income that you can keep making home loan payments. However, Chapter 7 will not wipe out or "lien strip" any mortgages or home equity loans, so it really works best if you have only one mortgage and do not have a high-value home.
If you file for Chapter 7, you can choose between two "bankruptcy exemption" systems to keep home equity, or home sale proceeds, up to a set amount:
a. California Exemption System 1 allows you to keep a home (which includes a mobile home, boat, or condo) with equity up to a specified amount, as long as you keep making the payments on any loan you have. The specified amount depends on your situation. Currently, you can keep a home with equity up to $75,000.00 if single and not disabled; $100,000.00 for families if no other member has a homestead; $150,000 if age 65 or older, or physically or mentally disabled; $100,000 if 55 or older with earnings under $15,000 (if single), or under $20,000 (if married). If you sell your home the sale proceeds up to the specified amount will be exempt from creditors for 6 months after you receive them.
b. California Exemption System 2 allows you to keep a home (including a mobile home, boat, or condo) with equity up to $22,500, or you can use part or all of this exemption to keep other property.
Contact Our Bankruptcy Lawyers in San Diego
At Steigerwalt Law Firm in San Diego, our bankruptcy attorneys understand financial difficulties and want to help you save your home and get you back on track with regular payments. If you are facing foreclosure and live in San Diego, contact the bankruptcy lawyers of Steigerwalt Law Firm today for your free debt evaluation and more information about filing for bankruptcy and stopping foreclosure.
