Help Stop Foreclosure – Arkansas Home Loan
One of the three primary reasons people seek out my firm for help, along with repossession and garnishment, is a pending foreclosure. Foreclosure is a legal process whereby, most commonly, a creditor who has lent you money to either purchase, improve or build a home seeks to sell your home to repay the loan after you have become delinquent in loan repayment. In Arkansas, a creditor can either go through Judicial or non-Judicial foreclosure. While there are differences as far as the creditor and attorneys are concerned, there is little practical difference to the average Arkansan.
When you borrow money to purchase, improve or build a home, the creditor has you sign a promissory note and then affixes a lien against your property. The lien secures the promissory note in the event that you fail to pay. It is this lien that is being “foreclosed” when the creditor initiates a foreclosure process. Typically, a creditor will send notice to you prior to initiating a foreclosure proceeding, but they do not always do so. They are required by law however to notify you once the process has begun. Their notice should tell you the date and time of the sale and let you know by when you must cure the default. If you have multiple mortgages, any of the mortgage holders can initiate foreclosure if you fail to pay.
One of the major reasons that people file a Chapter 13 reorganization in Arkansas is to stop foreclosures. A Chapter 13 repayment plan allows you to continue to make your regular mortgage payment on your home note while paying another amount spread out over 36 to 60 months to cure the arrearage on your home mortgage note. A person can also use Chapter 13 to gain some time to sell their property and pull their equity out of their home rather than losing the equity through the foreclosure sale or simply to obtain a little more time to move before relinquishing the property to the creditor. Either Chapter 7 or Chapter 13 “stop” a foreclosure, but only Chapter 13 allows you the opportunity to cure the defaulted payments by a payment plan. Chapter 7 only stalls the sale and it will eventually be sold if you do not cure the default.
Please note, pursuant to Arkansas law, a bankruptcy can only stop a foreclosure if the bankruptcy is filed prior to the foreclosure sale date. The preparation and filing of a bankruptcy can take up to 10 days if your case is complicated or you are not prepared for the process. Once the sale date has passed, the home no longer belongs to you and a bankruptcy cannot stop the sale, but it can still help you with a deficiency if the home sold for less than was owed on the home. If you are facing a foreclosure and would like advice on all of your legal options, call us today at 501.753.7400 to set an appointment for your free consultation or you may contact us via the “Email for help” button on this website.
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