Once you fall behind on your mortgage payments, you are considered in default, and your lender could start mortgage foreclosure proceedings. You will be served a summons with a copy of the mortgage foreclosure. After you are served, you will have twenty (20) days to respond. You should obtain legal advice immediately. Failure to respond will shorten the foreclosure process by allowing your lender to obtain a default judgment
Chapter 13 Bankruptcy
Traditionally, a Chapter 13 bankruptcy was the method for a homeowner to stop the mortgage foreclosure and allow the homeowner to catch up on the monthly mortgage payments. This is still the best way to deal with a foreclosure where the homeowner has regular income and wants to protect the equity in his home. You also want to contact your lender to see if you are eligible for mortgage modification.
What should I do?
Unfortunately, the current economic crisis has resulted in reduced real estate prices, sometimes to the point where the homeowner has a mortgage balance which exceeds the current value of his or her home (considered upside down or underwater on the mortgage). The situation is made worse when the homeowner has a reduction or loss of income. In such cases the decision to file Chapter 13 bankruptcy is not as clear.
If you need specific advice about financial situation, please contact Orlando Bankruptcy attorney, Randy Maddox .