Lansing, Michigan — Going through a home foreclosure in Michigan can be very stressful. Often, homeowners want to know how much time they have before they have to more out of their home. It’s true, however, that families are staying in their homes longer due to delays by the mortgage companies in the foreclosure process, although the end result often remains the same. Naturally then, one of the most common questions asked to Lansing bankruptcy attorney, Gene Turnwald, is “How long does the foreclosure process take?”

For the average mortgage company, the foreclosure process begins like this:

• If you did not make a mortgage payment on September 1st, a late fee is added on or about September 16th. After 30 days of being late on any payment, the first derogatory report is given to the credit reporting bureau. This affects your credit score and makes it harder to obtain credit or low interest loans.

• Once you are three to four months behind on your house payment, most mortgage companies will demand the full three or four months of payments at once and will not accept any partial payments.

• After four months behind, many mortgage companies begin the foreclosure sale process. A law firm is hired to do the foreclosure paperwork, and attorney fees are added to the late fees and late payments. You will receive letters from this law firm informing you of the foreclosure. They will post your foreclosure proceeding in the local newspaper with a set sale date, often referred to as a sheriff’s sale.

• Mortgage modification programs generally must be agreed to by the mortgage company before the date of the foreclosure sale. Also, if you wish to save your home, a Chapter 13 bankruptcy can do so, but it must be filed before the date of the foreclosure sale to stop the sale from taking place.

• After you are four to five months behind on payments, a foreclosure sale takes place at the county courthouse in the county where the property is located.

• When the foreclosure sale or sheriff’s sale takes place, the homeowner still has a six month right of redemption or a twelve month right of redemption if the mortgage covers a house and approximately four acres of land. During the redemption period, the homeowner may redeem the property or sell it for the full amount owed on the mortgage, plus late fees and attorney fees.

• A Chapter 7 bankruptcy at any time during the foreclosure process discharges the legal obligation to pay any debt incurred associated with the home if you are surrendering the home, but does not affect the six or twelve month redemption period.

• After the six month or twelve month redemption period has expired, if the homeowner is still living in the home, they will receive a 30-day Notice to Quit and be summoned eventually to landlord-tenant court for eviction proceedings, which takes another two to three weeks.

The law firm of Lansing, Michigan bankruptcy attorney, Gene Turnwald, will help you determine the best solution for your financial situation. If you are seriously considering foreclosure, contact Lansing bankruptcy attorney, Gene F. Turnwald, for a free consultation. Mr. Turnwald may be reached at (517) 347-6700 or through the firm’s website, www.bankruptcylansing.com.

About the Law Office of Bankruptcy Attorney Gene F. Turnwald P.C.
Specializing in criminal defense, divorce, personal injury and bankruptcy, the Law Office of Gene F. Turnwald is based in Okemos, Michigan. A graduate of Michigan State University, B.A., Mr. Turnwald attended Thomas M. Cooley Law School, J.D. College, and was admitted to the Michigan and U.S. District Court, Western District of Michigan in 1992, U.S. District Court, Eastern District of Michigan in 1996. Mr. Turnwald may be reached at (517) 347-6700 or through the firm’s website, www.bankruptcylansing.com.

In 2005, when Congress made sweeping changes to the Bankruptcy Code, they left virtually unscathed the Chapter 13 Bankruptcy provisions designed to save a home from foreclosure. Today, in the face of massive foreclosures, many families are unaware that Chapter 13 Bankruptcy may still be used to prevent foreclosure.

There are three different types of Bankruptcy that are generally available to individuals:

Chapter 7 Bankruptcy (sometimes referred to as a liquidation) is the most common. In this Bankruptcy qualified individuals are allowed to discharge most of their unsecured debt in exchange for allowing their non-exempt assets to be liquidated by a Trustee.

Chapter 11 Bankruptcy (sometimes referred to as a business reorganization) is expensive and typically reserved for business or individuals with substantial assets and substantial income. Chapter 11 allows debtors to reorganize their debt and pay their creditors over time. The amount that they pay depends upon the value of their non-exempt assets. The amount of time allowed is based upon current and projected income.

Chapter 13 Bankruptcy (sometimes referred to as a wage earner’s reorganization) is relatively inexpensive and exclusively for individuals with the ability to pay certain required obligations within a three to five year period. The amount that needs to be paid over a three to five year period is determined by the value of non-exempt assets, the amount of certain non-dischargeable debts, and current income.

Chapter 13 Bankruptcy allows property owners who are delinquent on their mortgage payments to abruptly stop foreclosure proceedings. This is true for any type of Bankruptcy filing, up to the day before the foreclosure sale. But Chapter 13 is uniquely structured to allow the property owner to pay the delinquency in equal monthly installments over as much as sixty months (the PLAN). So long as the PLAN complies with the technical requirements of the Bankruptcy Code, there is no need to get the lender’s agreement to the PLAN.

It is true that Chapter 13 Bankruptcy has rather stringent qualifications, including total amount of debt and ncome. It requires a competent Bankruptcy Lawyer to analyze the specific debt and income facts to determine if the property owner qualifies. But assuming a property owner can meet these qualifications, Chapter 13 provides a mechanism for them to stop the foreclosure and protect their property for five years … or at least until they can find a buyer at a reasonable price.

Time is the primary benefit. Chapter 13 will provide the time needed to ride out the current emergency.

Richard A. Brownstein

Brownstein & Brownstein LLP

21700 Oxnard Street, Suite 1160

Woodland Hills, CA 91367

Tele: 818 905-0000

[email protected]

Richard R. Brownstein is one of only 105 lawyers in the State, Certified by the California Bar Association, Board of Legal Specialization as a Bankruptcy Specialist.