If you are facing a foreclosure, it is important to understand the laws and the process. Once you know the process, you will be able to better understand the choices available to save your home. For example, a Chapter 13 Bankruptcy could save your Elk Grove home and wipe out your second mortgage.
Unless you’re a farmer or you’re incorporated, you likely have just two bankruptcy options at your disposal: Chapter 7 and Chapter 13. Which should you choose? The answer depends on a number of case specific factors. Some people are opposed to bankruptcy on moral grounds. It is much more difficult to declare Bankruptcy than it used to be and bankruptcy is highly regulated with requirements that could be an imposition on you.
Bankruptcy laws are designed to protect consumers from financial ruin and the potential to be abused by outstanding creditors. By allowing consumers to have their qualifying debts eliminated, bankruptcy offers all Americans a second chance at controlling their debt and allows them to get back on the path towards financial stability.
Foreclosure of a home occurs when a borrower falls behind on their home payment for a period of 6 months or longer. The lender will usually give what’s called a “Notice of Default” after falling behind 3 months. The trustee sale date for the home is usually 3 months after that. In California, nearly all homes must go through a non-judicial foreclosure before being auctioned off and/or going back to the lender.
Save Your Home From Foreclosure
When an Elk Grove home owner has lost his home through foreclosure, but has no liability for a deficiency under the anti-deficiency laws, the IRS adds insult to injury by treating the amount of the deficiency as forgiven debt and taxing the home owner as if it were actual income, except when the loan was a purchase money loan or it was used to improve the property. This has been true since 2007 under federal law.
As you may see, the laws of foreclosure and bankruptcy can be very complicated. Let our experienced law firm help.
The Elk Grove foreclosure attorneys of Bowman & Associates help clients throughout California from their offices in Sacramento and Folsom. If you or someone you know has legal questions regarding bankruptcy or home foreclosure, contact our experienced law firm for a free initial consultation.