Bellenot & Boufford, LLC

This is a general outline of things you should know if your home is in foreclosure or may soon be in foreclosure. This is NOT intended to be the only help or information you need. While the general concern of every foreclosure is that you may lose your home, every homeowner’s specific position, needs and possible resolution is different. One factor applies in almost all cases, however, the longer you wait to deal with your problem, the fewer options you will have available and the more it will cost.

1. You are able to bring your loan current to avoid foreclosure.
2. You negotiate a settlement:
   1. Modification
   2. Payment terms to cure any arrearage
   3. Forbearance
3. Refinance
4. Sell your home / short sale
5. Chapter 13 Bankruptcy to cure arrearage
6. The home is sold in foreclosure / bank owns after strict foreclosure / deed in lieu of foreclosure

• You need to survive, so expenses such as food, utilities, insurance and medical needs must always come first. THEN YOUR MORTGAGE.
• Let the credit card companies yell and scream all they want. PAY YOUR MORTGAGE FIRST.
• If your mortgage company will not accept your payment for any reason, save the money. Don’t spend it on anything. You will need every penny of it to eventually bring your loan current or to modify your mortgage. Do not give it to the credit companies or be tempted to spend it on anything other than your mortgage.

• DON’T PANIC. Don’t lose sleep, you will need your energy
• Don’t argue or blame your spouse, children, parents, cat or dog. You will need to support each other and rely on each other to get through this process.
• Get expert help immediately. There are deadlines to meet.

• Appearance
• Pleadings
• Motion for Mediation
• Answer
• Special Defenses/Counter Claim
• Discovery

• Appearances filed
• Pleadings closed or default
• Mediation
• Misc. Motions/Hearings – such as Summary Judgment
• Judgment of Foreclosure – (unless otherwise settled)
• Law Date (little or no equity or government lien)
• Sale Date (equity, more than one lien, government lien)

If you are continuing to negotiate settlement, attempting to sell your home, refinance, obtaining funds to cure arrearage, or just need time to move, ask the court for enough time. If the law date or sale date is approaching, open judgment and ask for the court to extend the date. If the court will not grant you as much time as you need, consider bankruptcy as an option to delay the law date or sale date. Keep in mind that if there is a sale date, the court appoints a committee and the committee incurs expenses starting 30 days before the sale date. To save your home, you will have to pay the committee fees.

If you have extensive unsecured debt (credit cards, medical bills, etc.) you may need to discharge those debts in order to afford your mortgage. You may need to clear this debt to qualify to modify or refinance your mortgage. If you cannot save your home, you may need to file bankruptcy to obtain a discharge of any deficiency.

If you cannot or choose not to save your home, work on timing. How much time to you need to move? How long can you stay? Do you need time to save money so you can afford to move? Everyone’s circumstance is different, but there are advantages to bankruptcy planning.

“Can I save my home?” is the first question you must answer. It may be the toughest question to deal with and will certainly be the most emotional question to handle, but it is necessary.

IF NO: If your circumstances are such that you cannot save your home, you need to consider other options to minimize your losses. Don’t put good money after bad. Don’t dwell on how difficult it is to accept the loss of your home. Start planning the rest of your financial life.

IF YES: If it appears that you can save your home, then you need to ask, “Is it worth saving my home?” If it’s worth saving your home, don’t waste one second. Do everything necessary to save your home. However, if your home is worth less than your mortgage, or if your budget is choking you, or if for any other reason it is not worth saving your home, consider all other options.