Home Foreclosure in Renton
If you have suffered a drop in income or other financial emergency and find yourself behind on your mortgage, it can be very difficult or impossible to catch up on the mortgage especially if you have a mountain of other debt. Once you fall a few months behind, the mortgage company will start a process known as foreclosure. A foreclosure proceeding allows the bank to have the house auctioned off so their loan will be paid off by the sale. After the house is sold the new owner can have you evicted.
A bankruptcy will immediately stop the foreclosure at any time up to the date of the auction. A Chapter 7 will only stop the foreclosure temporarily. The mortgage company can start the process up in as little as a month. However, Chapter 7 usually buys you more time than that. Some mortgage companies will take another look at mortgage modification once you have eliminated debt in Chapter 7, making it easier to complete the modification.
A Chapter 13 allows you to catch up on the mortgage over five years. If your financial situation has worsened and there is no realistic changes in your future, the Chapter 13 will not help except to eliminate or greatly reduce payments to other creditors in your plan. You will have to keep making your current mortgage payments along with a payment to catch up on your mortgage arrears. If your income has gone down to the point of not being able to pay your mortgage, your Chapter 13 plan to repay your mortgage will be unfeasible. Chapter 13 is perfect for people who have had a drop in income but are back on track, though not secure enough to catch up on the mortgage arrears all at once as required got get your home out of foreclosure.
Though a bankruptcy can stop the foreclosure up to the point of the auction, you are much better off planning a bankruptcy well before that date. You will get plenty of warning that a foreclosure is on the way. Usually the mortgage company will not start a foreclosure until you are three months behind on your mortgage. In recent years, mortgage companies have been waiting much longer than that. Washington law requires that they also offer you a chance to meet with them about other options then go to mediation if that fails before sending a notice of default, which starts the foreclosure. They can not sell your property for at least four months after sending the notice of default.