Mortgage foreclosure is a complicated process, and it is normal to have questions. Here is a list of common questions about New York foreclosure law, and some general answers. For more information about preparing a foreclosure defense, call Selby Legal at (845) 419-3383 for a free consultation.
1. What is mortgage foreclosure?
Foreclosure is the legal process through which a lender with money secured by a home loan forecloses the interest of the homeowner to satisfy the mortgage, allowing the building to be sold at auction. The process is usually not started until a borrower is at least three months behind on paying the money back. Once a foreclosure is completed, a new deed is prepared giving title to the home to the bank, or whoever purchased the property at the auction.
2. What happens during a New York foreclosure?
Before a foreclosure action is commenced, representatives from the lender (or the institution which now holds the loan) will try making contact with a delinquent borrower with phone calls, emails, or letters, in order to try to get the loan brought current. The first formal step toward foreclosure is to send out what’s called an “acceleration letter.” This letter is official notice that the the loan is being accelerated, meaning that the entire balance is going to come due on a certain date. Unless the whole loan is paid in full by that date, an attorney for the bank will prepare the first legal documents to be delivered to you by a process server. Once those documents (a summons, and a complaint) are in hand, you will have as little as 20 days to file a response, or your home may be taken away by court order without you having another chance to mount a defense.
Once a judge has reviewed pleadings from both sides (or only from the bank, if you did not file an answer to the complaint), a determination will be made as to whether the debt is valid. Without an attorney representing you, it is likely that this will occur, and then the judge will appoint an independent person called a “referee” to hold an auction and sell the property to the highest bidder. The lender gets to bid up to the amount owed (which includes the legal fees for the foreclosure itself), and a deed giving the house over to the bank is executed unless someone else shows up and bids more. In either case, once a foreclosure is complete you will no longer own your home.
Hiring Selby Legal, PLLC to provide a foreclosure defense means that an answer will be filed, forcing the bank’s attorneys to provide proof that all the laws around mortgage foreclosure were followed to the letter. During our consultation process, we will develop a plan of action to help you avoid the consequences of having a foreclosure in your credit report.
3. How far behind in my payments must I be for a foreclosure to be started to take my home away?
Unless you’re at least three months behind, it’s unusual for a foreclosure to be commenced, but if you are struggling to keep up with the payments then there is no reason to wait until you’re served with foreclosure papers to contact Selby Legal, PLLC. During a free consultation we can discuss options to avoid a foreclosure entirely, or if that’s not possible we can develop a defense strategy that best fits your personal circumstances.
4. What should I do if I am served with foreclosure papers?
Contact us right away. Once you’ve gotten those papers, you will have as little as 20 days to file an answer. If that doesn’t happen, a judge may find that you have defaulted, ending your chance to defend.
5. What is a chapter 13 discharge?
6. What types of debts are not dischargeable in chapter 13 cases?
7. What is a chapter 13 plan?
8. What is a chapter 13 trustee?
9. What debts may be paid under a chapter 13 plan?
10. Must all debts be paid in full under a chapter 13 plan?
11. Must all unsecured debts be treated alike under a chapter 13 plan?
12. Is there a difference between a debt and a claim?
13. How much of a debtor’s income must be paid to the chapter 13 trustee under a chapter 13 plan?
14. When must the debtor begin making payments to the chapter 13 trustee and how are the payments made?
15. How long does a chapter 13 plan last?
16. Is it necessary for all creditors to approve a Chapter 13 plan?
17. What is the difference between a secured creditor and an unsecured creditor?
18. How are the claims of secured creditors dealt with in chapter 13 cases?
19. How are cosigned or guaranteed debts handled in chapter 13 cases?
20. Who is eligible to file a chapter 13 case?
21. May a husband and wife file a joint chapter 13 case?
22. When should a husband and wife file a joint Ccapter 13 case?
23. May a self-employed person file a chapter 13 case?
24. May a chapter 7 case be converted to a chapter 13 case?
25. Where is a chapter 13 case filed?
26. What fees are charged in a chapter 13 case?
27. Is there anything a person must do before a chapter 13 case can be filed?
28. Will a person lose any property if he or she files a chapter 13 case?
29. How does the filing of a chapter 13 case affect collection proceedings and foreclosures that are filed against the debtor?
30. May a person whose debts are being administered by a financial counselor file a chapter 13 case?
31. How does filing a chapter 13 case affect a person’s credit rating?
32. Are the names of persons who file chapter 13 cases published?
33. Is a person’s employer notified when he or she files a chapter 13 case?
34. Does a person lose any legal rights by filing a chapter 13 case?
35. May employers or government agencies discriminate against persons who file chapter 13 cases?
36. What is required for court approval of a chapter 13 plan?
37. What is a priority claim?
38. When does the debtor have to appear in court in a chapter 13 case?
39. What if the court does not approve a debtor’s chapter 13 plan?
40. How are the claims of unsecured creditors handled in a chapter 13 case?
41. What if the debtor is temporarily unable to make the chapter 13 payments?
42. What if the debtor incurs new debts or needs credit during a chapter 13 case?
43. What should the debtor do if he or she moves while the case is pending?
44. What if the debtor later decides to discontinue the chapter 13 case?
45. What happens if the debtor is unable to complete the chapter 13 payments?
46. What is the role of the debtor’s lawyer in a chapter 13 case?
*Remember: The law often changes and each case is different. The above is meant to give you general information and is not legal advice.You should contact a bankruptcy attorney to obtain answers regarding your specific situation.
Have more questions? Selby Legal can properly advise you about filing bankruptcy. Contact us today to arrange a free consultation. (845) 419-3383