Foreclosure and bankruptcy are scary words, even for lawyers. Quickly finding an experienced lawyer should be the first step towards managing your debt. With a proper attorney, the burden of financial uncertainty can be eased. Between so many available options, you and your lawyer should be able to find a solution that suits your needs.
The Law Office of Yuriy Moshes goes above and beyond your ordinary law firm. We understand that things like this happen, and we want to help you get back on top. With years of experience in litigation and real estate law, Moshes Law can help you save your assets. Need help deciding what’s best for you and your family? Request a free consultation, and we can get started.
Our firm understands that it’s scary having defaulted mortgages and other debts hanging over your head. Having a navigating hand throughout this process is invaluable. As a debtor, you’ll be less vulnerable with an attorney in your corner. Bankruptcy and foreclosure in NY are different than in most other states.
On top of that, New York requires judicial foreclosures. This means that your lender will have to sue you in court and win before taking possession of your house. As you can tell, an experienced real estate attorney is the key to favorable results. Continue reading below to have a better understanding of the available options for foreclosures in New York.
In this situation, you ideally want to find a good cause for setting the foreclosure sale aside. This means that the court finds a reason to throw the foreclosure lawsuit out. Usually, this happens because the lender (1) broke the law, (2) didn’t have standing, or (3) was past New York’s statute of limitations.
New York has several state requirements for foreclosure notices and disclosures. The lender has to let 120 days of delinquency pass before sending a 90-day pre-foreclosure notice to homeowners. There are state requirements for the formatting and content of this pre-foreclosure notice. Only once this 90 day notice is served can the lender file the lawsuit.
The lender has to prove to the court that the summons was properly served to you. There are state and federal requirements for the formatting and content of the summons. Along with the summons, the lender is required to provide federal resources for mortgage assistance.
If your lender breached the loan contract, this would also stop the foreclosure. For example, your monthly payment or interest rate doesn’t match the amount listed in your loan contract. Another example would be if your payments weren’t correctly reported to the credit bureaus. If your credit information was recorded maliciously or you were misguided through the loan application process, your lender may be guilty of fraud or predatory lending practices.
To sue in court, you need to have standing. This means that the person suing, the Plaintiff, has the right to sue the other party, the Defendant. To sue, the Plaintiff has to prove that the Defendant harmed them in some way. Additionally, the Plaintiff has to prove that they can sue at this particular time for that particular matter in that particular court.
If your lender lost the promissory note or mortgage, they won’t be able to show that you owe them money. Without this proof, the case will be thrown out. This is also true if the lender doesn’t have the legal right to the promissory note or mortgage. If your delinquency didn’t cause the lender any harm, they can’t sue you for the late payments.
New York has a 6-year statute of limitation for debt collections. If someone is suing you for nonpayment, the lawsuit needs to start within 6 years of the delinquency’s start date. Otherwise, the case will get thrown out of New York courts.
If there are no defenses available, the next step is trying to stop the foreclosure through the right of redemption. New York provides the citizens of New York with the Right of Redemption. This isn’t a redemption period after the foreclosed house is sold. In New York, once the house is sold, it’s gone.
Instead, the Right of Redemption allows homeowners to redeem the house before the sale is completed. If the delinquent amount gets completely paid, the foreclosure is halted, and the home is redeemed. If this isn’t possible, there are still other options to help stop the foreclosure.
With the help of your attorney, you can negotiate a payment plan or a loan modification with your lender.
Lenders usually will agree to lower your mortgage payments. Decreasing your monthly payments to make them more manageable by extending the length of the loan or by lowering the interest rate. A second option is to lower your principal balance. Ask the lender if you can delay the principal. Instead, you can make a balloon payment on a later due date. Lenders may even forgive a portion of the delinquent amount. Forgiveness can be on either conditional or unconditional terms.
What if I’m too behind on the mortgage payments, and I just can’t afford my house anymore?
If it doesn’t seem like we can save this home, we can at least help you navigate the process of surrendering the home with the least negative effects on you. Surrendering your unaffordable home may help you find a future landlord that will accept your rental application until you find a new home. One option is requesting a deed-in-lieu foreclosure. Here, you would surrender your home to the lender, so they can sell it for the defaulted amount. This will keep the foreclosure off your credit.
A second option is doing a short sale. If the lender agrees, you can make a quick sale of your house for less than the defaulted amount. The proceeds of the sale go to the lender, and the rest of the amount is forgiven. This also keeps the foreclosure successfully off your credit.
If there isn’t any available defense and stopping the foreclosure wasn’t possible, then your next option would be to file bankruptcy. It’ll help clear or discharge your piling debts. There are several types of bankruptcies, but in New York, there are generally two types that will help with foreclosures — (i) Chapter 7 bankruptcy and (ii) Chapter 13 bankruptcy.
Chapter 7 is known as the ‘clean start’ bankruptcy. Once filed, the court will assess your assets and debts. The debts get paid by the proceeds from the court’s sale of your assets. If there’s any debt remaining outside of student loans, it gets discharged.
Unlike Chapter 7, Chapter 13 actually lets you keep your assets. In fact, it may indefinitely delay foreclosure and allow you to keep your house. Once filed, the court assesses your income and debts, and a compromised payment plan will be established. If you pay this monthly amount for the designated 3-5 years, any remaining and eligible debts will be discharged.
Each case is unique. Each case has different factors, so each case will have different best-case scenarios. These cases require proper care, and you need someone with an eye for detail. The Law Office of Yuriy Moshes can provide you the attention you need.
Continue reading for our general strategy. This strategy is tweaked according to your case and your wants. Don’t hesitate to give us your opinion. This is your house and your case, and we’re here to help you get the best results. If you want to get started, schedule your free consultation.
To begin, we have to go through all the paperwork you have associated with this loan, this home, and this lender. If you have received a pre-foreclosure notice or a summons, please include this. Additionally, include any communications, paperwork, or resources provided by the lender. Our team will go through this paperwork to see if there are any errors or blatant issues. From this review, we can assess the situation and know how to proceed further.
After reviewing all this paperwork, we can start strategizing how to proceed further. We would speak to you about our findings, and you can explain your wishes. Again, we will go through the information above, but the context of your case. Together, we will determine what will be your best solution. We understand that these decisions will be hard, but we’re here to work with you until we get to the end.
The last step is following through with our collective decision for your best solution. Ideally, we’ll stop the foreclosure before it’s too late. But don’t worry too much. As you can infer from the sections above, this is a complicated process. There are a lot of places for errors, and we will find any present.
A huge pro of filing Chapter 13 is that you keep your assets. There are several other benefits that you gain from using this option. Below, these other benefits will be further clarified. Ask your bankruptcy and foreclosure lawyer to clarify the pros and cons of Chapter 13.
Instead of sacrificing all of your assets like Chapter 7, Chapter 13 is a delinquency cure that modifies all your loans. The court consolidated all of your debt into a monthly payment. Making these monthly payments every month will eventually cure your mortgage arrears.
With all of your debts consolidated and paid by monthly payments, you can make real progress with your lenders. If you have made significant payments towards your mortgage but need time to catch up, Chapter 13 is your solution. Soon enough, you’ll go back to paying off your loan instead of playing catch up.
With all of your debts consolidated into one monthly payment, there’s no need for these distinguishers. You’re paying a monthly bill towards your general debts. This essentially eliminates second and third mortgages.
If your house is worth less than your mortgage, Chapter 13 will help you by consolidating this debt. It essentially allows you to strip these other liens of your home. Instead, you’re paying a fair rate with your monthly payment.
Chapter 13 will place an automatic stay on all the debt collections you’ve been dealing with. This means that all these collections will be immediately stopped, including your foreclosure. Additionally, if you make these payments on time for the designated 3-5 years, the rest of your eligible debts are discharged. You’re completely relieved of those responsibilities without ever having to move out.
Real estate attorneys are the best choice for foreclosure lawsuits.
Ideally, Chapter 13 will delay the foreclosure permanently. If you’re able to make the monthly payments for the 3-5 years required, it’ll discharge your debts, including the foreclosure. All while you remain in your house.
It’s difficult to say which is ultimately worse, but it’s very difficult to get another mortgage or a lease with a foreclosure.
You can lose your house in a Chapter 7 bankruptcy, but it’s possible to not. Chapter 13 lets you keep your home, but if you miss monthly payments, you’ll most likely lose your house.
If you filed Chapter 13 within the last 6 months, you cannot file for Chapter 7. However, filing for either of these bankruptcies will stop the foreclosure.
Yes, filing bankruptcy after foreclosure will discharge your debts. If it’s before the sale, it’ll stop the foreclosure. If it’s after the foreclosure sale, it’ll stop your responsibilities towards those delinquent payments.
There are several ways for a foreclosure & bankruptcy defense lawyer to help you with this situation. With the help of a legal professional, you can minimize the damage to your credit. You might even be able to keep your house or discharge your debts. With a good lawyer, you might be able to negotiate these problems away.
Good lawyers have extensive negotiation skills. Years of experience can turn a good lawyer into a great one. You need someone with years of experience, so they can help you understand your rights and pursue the best negotiation outcomes.
With offices in Manhattan, Brooklyn, and New Jersey, Moshes Law is here to help you manage your debt. As one of New York’s finest law firms, we promise to provide you with absolute care. Together, we can find solutions to your problems. Get a free consultation and let’s get started.