Monroe Bankruptcy Attorney 

The recent economic downturn has severely impacted many Louisiana homes. If you’re one of them, don’t give up hope. You’ve worked hard for your house. It’s not necessary to give it up, and it’s never too late to ask for help. Whatever stage of the foreclosure process you are in, it is to your best advantage to seek the services of an experienced Louisiana bankruptcy lawyer who can offer effective bankruptcy representation. 

Lucky for you, filing bankruptcy can stop home foreclosure. An experienced Monroe bankruptcy attorney at E. Orum Young Law Offices can help you how to file for bankruptcy to avoid foreclosure and reclaim your financial independence. 

Declaring bankruptcy under Chapter 13 or Chapter 7 is the quickest strategy for you to stop a foreclosure. Your primary residence is protected from foreclosure during a Chapter 7 bankruptcy as an exempt asset. You will be in a better position to make the required mortgage payments after you have settled all your debts and loans. If you file for Chapter 13 bankruptcy, the court will set you a budget and allow you 3-5 years to get your financial house in order. Eliminating the need for a second mortgage, such as a home equity loan, also increases the likelihood of being current on primary mortgage payments.

E. Orum Young Law Offices’ Louisiana bankruptcy lawyers have filed the most bankruptcies in Northeast Louisiana. We can help you choose which kind of bankruptcy is best for you and stop the foreclosure process. We will take your case to court if you ask us to, and we are willing to stand by our promise. Contact us immediately for a free case review.

Foreclosure Procedures and Laws in Louisiana

filing bankruptcy can stop home foreclosureBefore the 2010 foreclosure crisis, state and federal rules governing mortgage servicers and foreclosure processes were fairly limited and favored foreclosing lenders. Loan servicing and foreclosure procedures are now heavily regulated by state and federal laws. Most of the existing laws protect borrowers as well.

Generally, servicers are obligated to provide debtors loss mitigation options, record all stages of the foreclosure process, and adhere strictly to applicable laws. Furthermore, most people in Louisiana who get a loan to purchase a home sign a promissory note and a mortgage. These papers provide homeowners with contractual rights on top of state and federal legal protections.

In a foreclosure in Louisiana, you will almost certainly gain the right to:

  • receive a notice before foreclosure through a breach letter
  • apply for loss mitigation
  • receive a notice about the foreclosure
  • get special protections if you serve in the military
  • pay out the loan to avoid foreclosure, and
  • receive any excess funds from a foreclosure sale.

Therefore, if you are a homeowner in Louisiana who has fallen behind on your mortgage, prepare for the worst. Learn about every stage of a Louisiana foreclosure, starting with the first missed payment to the foreclosure sale. When you know how the process works, you will be able to make the best of your situation and try to save your home or, at the very least, undergo the process with minimal stress.

What Is Preforeclosure?

The “preforeclosure” stage is when you’re behind on your monthly payments, but before the foreclosure formally begins. Occasionally, people use the term “preforeclosure” to describe the time leading to the foreclosure sale. During this period, the servicer may charge you late fees and inspection charges. In most circumstances, a bankruptcy attorney must advise you about alternatives to prevent foreclosure and give you a preforeclosure notification known as a “breach letter.”

What are the Fees that Can Be Charged by the Servicer During the Preforeclosure Period?

In the event of a missed payment, most loans have a grace period of ten to fifteen days before the loan servicer begins charging a late fee. The servicer will charge this fee each month if you fail to make a payment. Review the promissory note you signed to find the late fee amount as well as the grace period of your loan. Your mortgage’s monthly statement also has this information.

Furthermore, most Louisiana mortgages enable the lender (or existing loan holder, which we will refer to as the “lender” for this article) to take the appropriate measures to protect its stake in the property. Property checks are carried out to ensure the home is inhabited and maintained properly. Inspections, often through driving by, are scheduled automatically if the debt goes into delinquency and costs roughly $10 or $15.

Fees for a broker’s pricing opinions (similar to appraisals) and property preservation charges, like yard upkeep or winterizing an abandoned house, are some additional fees that the servicer may charge.

Foreclosure Protections and Federal Mortgage Servicing Laws

If your home is your primary residence, the mortgage servicer is required by federal law to contact you no later than 36 days after the first missed payment and once again within 36 days after each subsequent delinquency to discuss loss mitigation alternatives such as a loan modification, repayment plan, or forbearance. 

The servicer must provide you with written information about potential loss mitigation alternatives and designate personnel to assist you in trying to find a way to avoid foreclosure not later than 45 days after you’ve missed a payment. 

There are a few exceptions to some of these requirements, such as if you’ve filed for bankruptcy or requested the servicer not to contact you following the Fair Debt Collection Practices Act (12 C.F.R. 1024.30, 12 C.F.R. 1024.39, 12 C.F.R. 1024.40).

Dual tracking is also prohibited under federal mortgage servicing requirements (pursuing foreclosure while a complete loss mitigation application is pending).

What Can I Do to Stop a Foreclosure in Louisiana?

The foreclosure process may be stopped in several ways, such as filing for bankruptcy, redeeming the property before the sale, or loan reinstatement. Of course, if you can figure out a loss mitigation alternative, such as loan modification, you can avoid foreclosure.

Loan Reinstatement

The borrower does not have the right to have the loan reinstated under Louisiana law. However, your loan documents might allow it. Review your mortgage to find out whether you have the option to complete a reinstatement. Otherwise, the lender might consent to reinstate your loan.

Property Redemption

One way to avoid foreclosure in Louisiana is to “redeem” the property. You must pay off the entire loan amount before the foreclosure sale to redeem. You can stop the sale under Louisiana law by paying the amount of the judgment plus interest and charges to the sheriff. (Articles 2340, 2724 of the Louisiana Civil Procedure Code)

Some U.S. states additionally provide foreclosed borrowers a redemption period following the foreclosure sale, in which they may repurchase their house. However, Louisiana law does not allow for a post-sale redemption period.

Bankruptcy Filing

If you want to stop foreclosure in Louisiana, filing for bankruptcy may be beneficial. Filing for bankruptcy is the best strategy to immediately stop a foreclosure sale if it is set to occur within the following day or two. When you declare bankruptcy, an “automatic stay” takes effect. The automatic stay acts as an injunction, preventing a lender from foreclosing or otherwise attempting to recover its debt, at least temporarily.

Filing for Chapter 7 bankruptcy may often postpone the foreclosure for several months. If you desire to keep your house, filing for Chapter 13 bankruptcy may be the solution. Talk to a Monroe bankruptcy attorney to learn more about your options.

How Filing Bankruptcy Can Stop Home Foreclosure

When you’re behind on your mortgage payments, have a foreclosure suit pending, or have already scheduled a sheriff’s sale, filing for Chapter 13 bankruptcy puts an immediate stop on all creditors. Creditor harassment also stops, and you are now protected by the federal bankruptcy court.

Any outstanding house mortgage payments may be made over time in Chapter 13 bankruptcy. Under Chapter 7, however, this is not an alternative. All past-due payments must be made, as well as the notes brought current. After filing for Chapter 13 bankruptcy, you will be able to restructure any unsecured debts, such as credit card debt, vehicle loans, and medical bills. This may help you fulfill your mortgage payments. The benefit of Chapter 13 over Chapter 7 is that you can create a debt repayment plan that is beneficial for you over five years.

Let Our Monroe Bankruptcy Attorney Help You!

Seeking the help of an experienced bankruptcy attorney is the most effective strategy to stop Monroe Louisiana foreclosures. Our bankruptcy attorneys have helped countless Louisiana residents stop foreclosure sales, and they are ready to help you as well. Call our Monroe, Louisiana office now to book your free case review and learn how declaring bankruptcy can stop a sheriff’s sale before you lose your home.