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Don’t “Tip Your Hand” to Your Mortgage Company
Filing a Chapter 13 bankruptcy will cancel any scheduled foreclosure auction. Once you file bankruptcy, the automatic stay takes effect and your mortgage company must immediately halt all foreclosure activity. But if you’re planning to file bankruptcy to stop a foreclosure, don’t “tip your hand” to your mortgage company.
Do it, don’t just say it
Your mortgage company will accelerate efforts to complete the foreclosure if they feel you may file bankruptcy. In some limited cases, you may be able to convince your mortgage company to voluntarily cancel an auction. But those cases are not common. The only legal way to assure that the foreclosure will not take place is to file bankruptcy.
Don’t tell your mortgage company you’re filing bankruptcy. Do it.
Completing a bankruptcy filing takes time. And you probably want to fix the underlying problem with the mortgage, not just cancel the sale. Chapter 13 bankruptcy allows you to repay your mortgage delinquency over as much as five years. Use bankruptcy not just to stop the sale but to get your mortgage (and other debts) back on track.
The bankruptcy threat
Just like in debt settlement negotiations, your attorney may use the threat of bankruptcy to negotiate with your mortgage company. The bankruptcy threat may induce your mortgagor to consider alternatives to foreclosure. But the threat is only credible when it comes from your bankruptcy attorney. And if you’re planning on filing bankruptcy anyway, there’s usually no reason to tell the mortgage company beforehand.
Keep your mortgage company happy
Mortgage companies want one of two things from their customers: either pay the mortgage or give up the house. At the same time, the foreclosure process is expensive, so that’s really their last resort. Mortgage companies step up efforts to complete a sale if they feel the homeowner may be taking steps to cancel an auction. If you receive notice of foreclosure, you should discuss your options with experienced bankruptcy counsel. But don’t tip your hand to your mortgage company before you have a clear plan.
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Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
