Radcliff Foreclosure Defense Attorneys
Using Bankruptcy to Save the Homes of Hardin County Clients
The thought of losing your home to foreclosure is unthinkable. Sometimes debt and other unexpected financial obligations manage to surprise you and take over your life, forcing you to miss mortgage payments. Regardless of your circumstances, missing enough payments will make you vulnerable to a foreclosure lawsuit in Kentucky state court.
At Musselwhite Meinhart & Staples, our team treats our clients like family. We strive to do everything in our power to fight for their rights and protect their interests, so our number one priority in foreclosure defense cases is to help our Kentucky clients stay in their homes. Our Radcliff foreclosure defense attorneys have many years of experience navigating the legal processes involved in halting foreclosures through bankruptcy.
If you are at risk of losing your home through foreclosure, do not wait to call (270) 200-6326 or contact us online to schedule a free consultation. We can work quickly to halt foreclosures and protect your home.
When Does the Foreclosure Process Start?
The good news is you will not be at risk of foreclosure if you only miss one or two monthly payments. Things happen, and while you may be subject to late fee penalties mandated by your mortgage agreement, you will not be at risk for foreclosure.
Your bank or lending institution must wait 120 days – or approximately 4 months – from the date of the initial missed payment before they can file a foreclosure lawsuit. This federal protection gives you a significant amount of time to catch up on missed payments or file for some form of loss mitigation, including a loan modification, which can further delay when a foreclosure process can begin.
The reality is that banks and lending institutions do not typically like to pursue foreclosures. Foreclosure is an expensive, resource-consuming process that leaves them with property they often did not intend or want to acquire. This means that your lender may reach out during your 120 days of nonpayment to try and find a mutually agreeable solution that avoids foreclosure.
Always speak to a qualified legal representative before accepting any modified deal with your lender, as they will be looking out for themselves, not you. Also consider speaking to a lawyer if your lenders’ communications begin to turn into creditor harassment.
How Foreclosures Work in Kentucky
- Bank begins foreclosure proceedings after missed payments. Once 120 days have passed since the first mortgage payment was missed, your lender has the ability to file a foreclosure lawsuit in Kentucky state court. For the purposes of your planning, you should assume your lender will file as soon as they are legally permitted to do so. Our Radcliff foreclosure defense attorneys can evaluate your situation and advise on immediate next steps if you believe you will soon be the subject of a foreclosure lawsuit.
- You have 20 days from the date the complaint is filed in court to formally respond. If the complaint goes unanswered, your lending institution can request a default judgment to automatically win the suit. Many times, in the absence of a response or action from legal representation, the default judgment is granted. This will dramatically accelerate the foreclosure process and could lead to you quickly and irreversibly losing your home.
- If you respond, litigation begins. It is essential you and your legal representation formally respond to a foreclosure complaint in court before a default judgment can be granted. By responding and objecting to the complaint, the suit will move into litigation and prevent a speedy sale.
- Summary judgment is filed by your lender. Because you presumably have not kept up with your mortgage payments, your lending institution will most likely file for a summary judgment; a judge will in most cases grant one, opening the door to a foreclosure action. It is still important to force a foreclosure suit into the litigation phase to buy you and your legal representation more time to negotiate with your lender and pursue various forms of relief, including filing for bankruptcy.
- Foreclosure is approved, followed by an auction and sale. Once approved by the court, a foreclosure auction is preceded two appraisers assessing the value of your property, the posting of a foreclosure sale notice to the front of the home, and the placement of auction advertisements in a local paper. The lending institution is often the only bidder at the auction itself, leading to them purchasing the property and placing your continued tenancy in immediate jeopardy. If the purchase price is less than what the property is actually worth, your lender may be able to pursue a deficiency judgment against you, which requires you to pay the difference.
Can a Foreclosure Be Stopped?
It is important to take decisive action before a judgment is rendered in the state court. While there are some forms of relief available for homeowners after a judgment has rendered, you are less likely to prevent a foreclosure once the auction is imminent or has been completed.
If you gather the necessary funds to bring your mortgage “current,” you may be able to work with your lender to cancel the foreclosure and resume regular payments. Kentucky does offer a redemption period of 6 months, meaning if you are able to reimburse the auction winner of the sale price plus fees, you can potentially “redeem” your home.
More than likely, though, you will not have the financial resources to reinstate or redeem your home if you were unable to keep up with your mortgage in the first place. Luckily, bankruptcy is another form of foreclosure defense that can help you protect you.
How Bankruptcy Can Stop Foreclosure in Kentucky
Bankruptcy is a powerful institution that helps people manage debts they are otherwise unable to pay in full. While one of the main advantages of filing for bankruptcy is the ability to discharge unsecured debts, another significant benefit is the automatic stay.
Automatic Stay Can Halt Foreclosure
An automatic stay is a court order that prevents any collection actions from being taken against you for the duration of your bankruptcy. Collection actions includes wage garnishment, any type of creditor harassment, repossession, and foreclosure. In other words, merely filing for bankruptcy can prevent an imminent foreclosure or freeze a foreclosure in progress.
Can Both Chapter 7 and 13 Stop Foreclosure?
There are two types of consumer bankruptcy, both of which can stop foreclosure. Chapter 7 bankruptcy liquidates nonexempt assets to partially repay outstanding debts. Chapter 13 bankruptcy restructures any outstanding debt into a single monthly payment that will be made over a period of 3 to 5 years.
How Long Does the Automatic Stay Last?
The automatic stay only lasts long as your bankruptcy does. Chapter 7 bankruptcies will conclude once the liquidation process is complete, the duration of which will vary depending on the extent and complexity of your nonexempt assets and any other procedural complications that could arise. Chapter 13 bankruptcies by design will last as long as 5 years.
Note that both types of consumer bankruptcy only permit you to discharge unsecured assets, or those without collateral, which precludes missed mortgage payments. However, leveraging bankruptcy to discharge other types of debt can give you the financial flexibility to make your mortgage current. The time in which you are protected by the automatic stay also gives you time to reorganize and raise the necessary funds. If you file for Chapter 13 bankruptcy, for example, you could have as many as 5 years of foreclosure protection so long as you make the court-mandated payments.
When Do I Need to File?
In order to stop a foreclosure, you must file for bankruptcy before the foreclosure auction takes place. The foreclosure auction counts as a collections action, so it will be prohibited from continuing once an automatic stay has been issued.
Let Us Help You Avoid Foreclosure Through Bankruptcy
Losing your home to foreclosure can be a terrifying prospect, but it does not have to be your reality. Our Radcliff foreclosure defense lawyers at Musselwhite Meinhart & Staples have over 100 years of legal experience and are prepared to do whatever it takes to keep you and your family safe in your home. We have helped our Kentucky clients halt foreclosure proceedings via bankruptcy’s automatic stay before working with them to build a more sustainable financial future. Because of the urgency foreclosure can present, we offer same-day appointments and even same-day bankruptcy filings to stop imminent foreclosures.
Our law firm provides a full range of legal services to help you and your family achieve your goals. We speak your language. We are here to help you understand your legal options, what to expect and what steps we can take to protect you.
Our firm offers over the phone and video consultations for your safety and convenience. All consultations are free.
Our attorneys treat you like family. We care about helping you find the best resolution to your case.
We are accessible to our clients and are available 24/7.
Our attorneys offer honest advice and tailored solutions to your unique goals.
We are friendly and approachable lawyers who listen and understand your needs.
Our attorneys have decades of experience with successfully handling a variety of legal matters.