Chapter 13 bankruptcy is a legal process that allows individuals with regular income to reorganize their debts and create a repayment plan. Unlike Chapter 7, Chapter 13 focuses on debt repayment over three to five years. Chapter 13 bankruptcy allows you to use such a payment plan to pay off mortgage arrearages. Essentially, Chapter 13 stops foreclosures.
An Arizona bankruptcy lawyer or an Arizona real estate lawyer will advise that a lender cannot be compelled to foreclose and take title to property. As such, these delayed foreclosures are causing uncertainty and potential liability to the debtor.
Any competent Arizona real estate lawyer, Arizona foreclosure lawyer or Arizona bankruptcy lawyer will agree that the Arizona anti-deficiency statute is one of the most important Arizona laws protecting borrowers with loans secured by a residence. This statute will prevent many mortgage lenders from suing debtors for any deficiency amount after a foreclosure occurs. In a surprise ruling, a recent Arizona Court of Appeals case has extended the Arizona anti-deficiency statute to construction loans.
When you stop making mortgage payments, an experienced Arizona foreclosure lawyer or Arizona real estate lawyer will advise that you will still be able to live in your house for at least 90 days after a foreclosure notice is filed and delivered to you. And depending on how aggressive the lender is, a foreclosure notice may not be filed for quite some time after you stop making payments.
A common question I get is how long must a person wait after a foreclosure, short sale or bankruptcy before that person will qualify for another home loan. Although an Arizona real estate lawyer or Arizona bankruptcy lawyer is not a “credit expert”, Fannie Mae has established a number of different waiting periods for so called “derogatory credit events”.