Impact of bankruptcy in Keizer Oregon.  

Bankruptcy may be an option to stave off foreclosure. If an individual files for bankruptcy before a foreclosure action is initiated, an automatic stay may prevent the foreclosure from moving forward.  Chapter 7 may delay a foreclosure for months and Chapter 13 may allow individuals to save their homes.  Experienced legal professionals can be of assistance in utilizing bankruptcy to positively influence a foreclosure action.  

Homestead exemption.

Many states have homestead exemptions that protect the home in which a family lives from being sold to satisfy debts held by judgment creditors. These exemptions do not protect from foreclosure by a mortgage holder, or the trustee, under a deed, or trust where the home secures a loan for the purchase money.    

Keizer Oregon Foreclosure.

The foreclosure process begins when a borrower/homeowner defaults on loan payments for a mortgage, and the lender files a public notice of default which is called a Notice of Default, or Lis Pendens.  Individuals should speak with a Oregon foreclosure attorney who may offer legal alternatives to foreclosure actions, based on state laws and the financial position of a homeowner.  

Judicial foreclosures. A judicial foreclosure (28 USC § 2410) goes through the court system and may move more slowly than a non-judicial foreclosure.  Benefits to homeowners include time to  seek legal counsel and devise a strategy to oppose the foreclosure process.  Judicial foreclosures can last from months to years, depending on the state where the foreclosure action is filed.  The mortgage servicer must wait until a borrower is at least four months delinquent on payments to begin action, by notifying a homeowner and filing a lawsuit  in the county where a property is  located.  The petition for foreclosure will outline reasons for foreclosure for a judge to sign off.  A Oregon foreclosure attorney can help with a defense that justifies the payment delinquency.  

Non-judicial foreclosures.  Non-judicial foreclosure (26 USC § 7425(b)) actions often proceed faster than judicial foreclosures and can be completed within months. The majority of states allow non-judicial foreclosures, that usually start when the lender’s trustee records a notice of default at the county recorder’s office. The notice of default is mailed to the borrower in most cases, and may offer a chance to cure the default before the foreclosure sale can be held. 

Foreclosure common outcomes.

  1. The homeowner/borrower pays off the default amount during a grace period specified by state law, known as pre-foreclosure and reinstates the loan.
  2. The  homeowner/borrower sells the property to a third party during the pre-foreclosure period and the proceeds are used to pay off the loan.
  3. The home is sold to a third party at a public auction at the end of the pre-foreclosure period.
  4. The lender takes ownership of the property with the intent to sell it, either by agreement with the homeowner/borrower during pre-foreclosure through a short sale foreclosure, or through purchase at the public auction.  

Sources.

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics

26 USC § 7425(b)

28 USC § 2410