Is Bankruptcy The Best Option For Keeping Your Home During Foreclosure?
Bankruptcy lawyers will, of course, tout bankruptcy as an option for fighting foreclosure. It is certainly not the only option, and should only be used as a last resort. That’s because a Chapter 7 bankruptcy will stay on your credit report for the next 10 years. Chapter 13 will stay on your credit report for the next 7 years. During that period, you will find it difficult to secure affordable credit or rent an apartment. Many landlords ask whether or not you’ve filed for bankruptcy in their rental application.
The stakes are unreasonably high when it comes to bankruptcy, so you want to ensure that you’ve exhausted all other options before filing under Chapter 7 or Chapter 13 to save your home. In this article, the Ohio foreclosure defense attorneys at Kohl & Cook will discuss ways you can potentially save your home and avoid bankruptcy altogether.
Foreclosure defense options
Both state and federal law protect homebuyers from certain creditor actions which are currently deemed to be illegal. If your loan service provider violated any of these rules, you may have a defense to foreclosure under a law known as RESPA (Real Estate Settlement Procedures Act). RESPA requires lenders to disclose to borrowers how much their loan will cost and places a cap on how much loan providers can charge for various fees related to getting a loan. If a bank tries to foreclose on a loan that they drafted in violation of RESPA, you could have a defense to the wrongful foreclosure.
In addition to RESPA, there are other federal laws that govern mortgages that might also have been violated during your foreclosure. This includes the Truth in Lending Act (TILA) and the Uniform Commercial Code (UCC).
Foreclosure avoidance options
Depending on whether or not you want to keep your home, you have options to avoid foreclosure without filing for bankruptcy. If you want to keep your home, you can ask the bank for a mortgage loan modification. Our lawyers can help with this process. We will help negotiate with the lender to negotiate a better deal. You can ask the lender for:
- A lower interest rate
- A reduction in the remaining balance on the principal
- An extension of the loan repayment period
- Merging past due payments into the overall amount of the loan
- A lower monthly payment
If you’re not interested in keeping your home, you can still avoid bankruptcy by methods such as a deed in lieu of foreclosure, a short sale on the home, or cash for keys. These methods of handling a delinquent mortgage may take less of a toll on your credit report than bankruptcy would.
Contact an Ohio Foreclosure Defense Attorney Today
The Columbus foreclosure defense lawyers at Kohl & Cook Law Firm, LLC represent the interests of Ohio residents who are facing foreclosure. Before you contact a bankruptcy attorney, exhaust your options for avoiding bankruptcy with foreclosure defense lawyers helping you every step of the way. Call today to schedule an appointment, and we’ll answer any questions you may have.
