Missing your mortgage payment too many times in a row can be cause for serious concern. If you feel you are coming perilously close to losing your home, you should know that help is available. There are several Federal laws affecting foreclosure that you may be able to have recourse to in order to save your home. While nothing is guaranteed, it's still an excellent idea to gain more information about these laws and how they may be able to assist you in your time of greatest need.
Can Filing for Bankruptcy Help You Save Your Home?
Filing for bankruptcy may not be the first option you think about when looking for ways to save your home. You are most likely dreading the effect that a bankruptcy may have on your credit. It's certainly not a move you would make unless you were absolutely sure of facing foreclosure. But keep this mind: Filing for bankruptcy will automatically stay any foreclosing action that may have been initiated.
Your Level of Bankruptcy Protection Depends on the Type
Of course, the stay may not be permanent. Whether it is lifted or not will depend on whether the holder of the mortgage has any equity to speak of in the actual property. If you have filed for bankruptcy under Chapter 11, the stay may be lifted either because you don't really have any equity of your own in the property or because the motion does not allow for adequate protection of any equity that the mortgage holder does have in that property.
Filing a Straight Petition for Bankruptcy is Also Possible
If you have filed under a straight petition for bankruptcy, in the form of a statement in which you ask for the summary discharge of all your debts, your claim may be even more precarious. In this case, the holder of the mortgage will normally be allowed to proceed with foreclosing on your home if it turns out that you definitely have no equity in the property. Even if you do possess some level of is equity, your home could still be sold by the bankruptcy court.
How Can the Soldiers and Sailors Act Help Save Your Property?
If you are currently serving in our nation's armed forces and received your mortgage before you entered the military, you may be entitled to a special level of protection under the Soldiers and Sailors Relief Act of 1940. Of all the Federal laws affecting foreclosure, this may be the one that proves most useful to you. This special Act allows a service member to set aside the default judgment that immediately precedes the opening of foreclosing proceedings. The onus will then be on the holder of the mortgage to prove that the person who filed the claim is not a currently serving member of the military.
You Will Need to Be Present or Represented at the Hearing
If you are currently are serving in the armed forces, the mortgagor is in the armed services, you will have to be physically present or represented by an attorney at the hearing. This means that certain forms of the foreclosing process, such as point of sale, will not be permitted. It also means that if the court should rule that your ability to pay off your mortgage has been adversely affected by your service in the military, you will be granted an indefinite stay against all foreclosing proceedings while you are currently serving.
Is It Better to File for Bankruptcy or Under the Soldiers and Sailors Act?
You may be wondering which of these two major alternatives is the right one for you to make use of in your time of need. If you are a service member, the Soldiers and Sailors Act may well be your best bet to get the time you need to pay your debts. This is a far better move than filing for bankruptcy. But if you are not a currently serving member of the armed forces, you will obviously not be taken seriously if you file under the Soldiers and Sailors Act. If you have exhausted all of your other resources and bankruptcy is the only way to gain breathing space, then you may as well take the plunge.
Filing for Bankruptcy is Better Than Being Foreclosed On
You can take some solace in reflecting on the fact that filing for bankruptcy is at least superior to being foreclosed on. Although it will certainly do damage to your credit rating, this damage will be nowhere near as permanent as it would be after a foreclosure. Most lenders won't even consider you for a future home loan if they see that you have been foreclosed on in the past. With bankruptcy, you will at least have a fresh slate to start again from.