COLORADO BANKRUPTCY LAWS AND FORECLOSURE
Falling
behind on your mortgage can make your world
feel like it is falling apart. It's important
that you take action as quickly as possible;
if you wait too long, you may find your
options to be limited.
Chapter
13: Using Bankruptcy to Catch Up
Filing
Chapter 13 Bankruptcy gives you the ability
to stop a foreclosure and catch up on your
past due mortgage payments over a 3-5 year
period. This is especially useful for people
who have fallen behind on mortgage payments
due to a temporary financial setback such as
illness or unemployment, and who are now able to
catch up over time. It's important to speak
with an experienced Colorado bankruptcy
lawyer before filing a
Chapter 13 Bankruptcy because your ability to stop the
foreclosure may be limited if you've been in
Chapter 13 Bankruptcy in the past.
Special
Forbearance
Your
lender may be able to arrange a repayment
plan based on your financial situation and
may even provide for a temporary reduction
or suspension of your payments. You may
qualify for this if you have recently
experienced a reduction in income or an
increase in living expenses. You must
furnish information to your lender to show
that you would be able to meet the
requirements of the new payment plan.
Mortgage
Modification or Refinance: You may be able
to refinance the debt and/or extend the term
of your mortgage loan. This may help you
catch up by reducing the monthly payments to
a more affordable level. You may qualify if
you have recovered from a financial problem
and can afford the new payment amount.
Pre-Foreclosure Sale
This will
allow you to avoid foreclosure by selling
your property for an amount less than the
amount necessary to pay off your mortgage
loan. Your lender may allow you to do this
if you are able to guarantee a quick sale of
your property and can meet your lender's
guidelines.
Chapter
13 Bankruptcy Option
If you can
now afford to make your mortgage payments,
but still wish to sell your home, filing a
Chapter 13 Bankruptcy will cancel the
scheduled foreclosure sale and give you time
to list your property for sale to gain more
profits and net proceeds from your home than
you would typically earn at a foreclosure
sale.
Deed-In-Lieu Of Foreclosure
As a last
resort, you may be able to voluntarily "give
back" your property to the lender. This
won't save your house, but it is not as
damaging to your credit rating as a
foreclosure. Your lender may be willing to
accept a deed-in-lieu of foreclosure if you
are in default and don't qualify for any of
the other options, your attempts at selling
the house before foreclosure were
unsuccessful, and do not have a second
mortgage on the property.
