Free Bankruptcy Services in Irvine

Avoid Foreclosure in Los Angeles, Orange, and San Diego Counties

Debt can quickly become overwhelming. A change in financial circumstances can leave you struggling to pay credit card bills, medical costs, daily living expenses, and your sizable monthly mortgage installments. If your financial circumstances have been altered permanently, you may no longer be able to make your monthly mortgage payments, and before long, you may find yourself at risk of foreclosure.

Filing for bankruptcy can help you address and eliminate many types of debt. The institution can put a stop to foreclosure and give you time to get your financial affairs in order. At Lawyers Realty Group, we offer free bankruptcy services in Irvine to California clients that are exploring exiting their home through a short sale. By combining filing for Chapter 7 bankruptcy with a subsequent short sale, you can eliminate many types of debt and deficiency liabilities and exit your mortgage agreement – all while avoiding the worst consequences of foreclosure and eviction.

How Bankruptcy Stops Foreclosure

When you file for bankruptcy, the court will issue an automatic stay, which puts a temporary halt to all collection actions – including foreclosure. So long as you file for bankruptcy before a foreclosure sale takes place, you can freeze the foreclosure process and buy yourself valuable time and flexibility.

While the automatic stay remains in effect, you can continue to live in your home. Foreclosure efforts can generally restart once your bankruptcy filing has concluded, a process that generally takes between 5 and 6 months. Alternatively, your lending institution could choose to aggressively file a motion for relief, which would potentially allow them to reinitiate foreclosure proceedings while your bankruptcy is still in progress. In this scenario, you may only have about 3 months before foreclosure restarts.

Bankruptcy alone will not release you from your mortgage obligations. While a successful Chapter 7 filing will typically allow you to discharge unsecured debts, including credit card bills and medical debt, it does not permit you to discharge secured debts, including unpaid mortgage payments. You will, however, be generally unable to discharge deficiency liabilities and debt taxation on your mortgage.

Following a bankruptcy filing, your outstanding mortgage will remain as a lien on your home. Pursuing a short sale can help you exit your mortgage agreement and release the lien.

What Is a Short Sale, and How Does It Help?

A short sale involves selling your home for less than your remaining mortgage balance. Your servicer must agree to this sale. Typically, the negotiated short sale agreement releases the homeowner from all liens, liabilities, and other encumbrances placed on the property, allowing them to completely “exit” their agreement.

In order to be eligible for a short sale, your outstanding mortgage balance must exceed the current value of the property. You must also have a qualifying documented hardship, like a loss of income, injury, or divorce, that prevents you from honoring your current mortgage agreement.

Requesting and initiating a short sale can lengthen the amount of time that you can remain in your home. Most lending institutions will delay foreclosure proceedings while a short sale is being negotiated and finalized. When combined with a short sale, you may be able to stay in your home for1 year or more. This gives you ample time to raise funds and secure new living arrangements.

Many banks and lending institutions will also offer cash incentives to homeowners who cooperate in a short sale process. Servicers offer these incentives when they stand to benefit from avoiding the costly and time-consuming foreclosure process.

Our attorney realtor can help you safely get out of your home. Call (949) 264-0966 or contact us online to explore whether combining bankruptcy with a short sale makes sense for your situation.