My home is scheduled for Sheriff Sale next week and I am afraid I will be thrown out on the street. Can you help me?
Mr. Taieb has helped several clients who were a few days from losing everything.
The first issue you need to decide is whether you wish to keep the home or just buy time. If you wish to keep the home you should file a Chapter 13 reorganization which will immediately stop the Sheriff Sale and allow you to either pay back the arrears or try to get a loan modification.
However, as Steven N. Taieb, Esq. has always emphasized, you have to look at the equity in your home. For example, Mr. Taieb recently had a client come is who had a Sheriff Sale scheduled with a home worth $250,000 and they owed $468,000. This client realized that it was insane to do a loan modification when the home was so underwater. Therefore, he decided to file a Chapter 7 which stayed the Sheriff Sale but he will eventually lose the home, since he is not reorganizing. However, he will get a fresh start, clean the slate and be able to be eligible for a new mortgage within two years of discharge.
However, one of Mr. Taieb’s clients had a similar situation and filed Chapter 7 to get a fresh start. After he was discharged, his income increased and the home still did not go to Sheriff Sale and he refilled a Chapter 13 to try to save the home.
In most cases it is always better to file a Chapter 13, since you have a lot of options with real estate:
- 1. you can cure the mortgage arrears over 60 months if you can afford it;
- 2. you can try to get a loan modification which is part of your plan; or
- 3. you can do a plan to sell the home if you can’t afford to keep the home but it has equity.
Some of Mr. Taieb’s clients have done an arrearage cure which can have hefty payments, but they eventually get a loan modification which substantially lowers their trustee payment down the line.
Thus either a Chapter 7 or chapter 13 will stop the Sheriff Sale, however, if you definitely want to save your home, you should file a Chapter 13 since it is dangerous to file a Chapter 7 since the Sheriff Sale could occur during the Chapter 7 if the stay is vacated, and then you won’t have the opportunity to save your home.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 32 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.