When you fall behind on your house payments to a mortgage creditor, that creditor may foreclose on your property. The number of months you are behind may vary, but at some point the lender may refuse monthly payments unless you pay all of the delinquency. If you cannot do this, the entire amount of the note can be accelerated, the full amount made due at once, and your home taken by foreclosure. You should receive proper notice of foreclosure, and a sale of your home will be scheduled after a court enters a Decree of Foreclosure.
After foreclosure, the creditor will sell the home and apply the proceeds against the costs of foreclosure, fix-up, resale and the balance of your mortgage. If the proceeds of this sale are equal to or more than this amount, you will have no further liability. If the proceeds of this sale are less than this amount, which is usually the case, there is a resulting deficiency. You may be obligated to pay this deficiency. Like any other debt, the creditor can pursue whatever collection action it deems appropriate.
If the deficiency is forgiven, that is, the creditor elects to not pursue collection of the debt, this may result in "income" to you for IRS purposes. You will be taxed on the amount of the forgiven debt, though you received no money.
The filing of a bankruptcy can cancel this mortgage debt so that you will have no further obligation to pay.
Filing a Chapter 13 bankruptcy may give you the opportunity to stop the foreclosure, keep your home and pay the delinquency over a reasonable period of time, while continuing to make future mortgage payments. To ensure that you have the option to stop the foreclosure you should seek competent legal advice when a foreclosure is filed or sooner.
If your mortgage payments are behind, you should immediately determine your bankruptcy options. Quick action may avoid the foreclosure altogether, and avoid expensive additional costs and fees.
Each person's situation is different. What applies to one person may not apply to another. To determine bankruptcy options as they apply to you, an attorney competent in bankruptcy matters should be consulted.
If you wish to have a confidential appointment to discuss your bankruptcy options with an attorney in the Law Offices of John M. Miller, you may do so by calling (515) 225-3333 between the hours of 8 a.m. to 5 p.m.(Central Time), Monday through Friday.
We are a debt relief agency. We can help you file for Chapter 7 and Chapter 13 relief under the Bankruptcy Code.
The legal information provided for on this website is intended to be general in nature. The facts and circumstances of each person's bankruptcy can have a bearing on the information on this site. You should not rely completely upon this information, without first contacting an attorney who is experienced in the area of bankruptcy law.
