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.
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.
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”.
Some people mistakenly believe that filing bankruptcy will force a mortgage lender to agree to a home modification. Not true. However, an experienced Arizona bankruptcy lawyer and real estate lawyer will advise you that you may be able to get rid of junior liens if the value of your home is worth less than what you owe on your first mortgage.
There are many myths about the benefits of short sales. The downside of short sales may be much more than the upside because the legal ramifications and adverse consequences could be more severe than opting for a foreclosure. Always consult with an experienced Arizona real estate lawyer, an Arizona foreclosure lawyer or an Arizona bankruptcy lawyer before considering a short sale.