How to Stop a Foreclosure in Alabama

      QIs there any way to stop my mortgage company from foreclosing on my home if I am four months behind on my payments?

       A:  There are several ways to stop a foreclosure.  One of the most common ways to prevent a mortgage company from foreclosing on your home is to file Chapter 13 Bankruptcy.  Chapter 13 allows you to reorganize your debt and gives you the opportunity to pay your mortgage arrearage over a 3 or 5 year period.  It is important that you consult with an experienced Bankruptcy attorney and file your case before the date that the foreclosure is scheduled.  Once the foreclosure sale is held, Chapter 13 cannot save your home.  Filing Chapter 13 can also stop vehicle repossessions and may reduce your total monthly expenses.

             Another possibility to stop a foreclosure is to contact the mortgage company and ask if they will consider a loan modification or forbearance agreement.  Sometimes the mortgage company will agree to add the payments that you have missed to the end of the loan.  Remember, most banks and mortgage companies are not in the real estate business and they have no interest in owning your home — they simply want their payments.  If you have a good explanation for missing several payments (such as an illness in your family) and you have the ability to resume your regular payments this may be a good option for you to consider.  If you know in advance that you may miss a few payments you may be able to work out an agreement like this before you get in foreclosure to begin with.  You must be persistent and keep calling the mortgage company until you find a person who can help you.

             A third option to consider is to re-finance your home.  Sometimes this is the most difficult option because time is limited and many mortgage companies require you to be current on your mortgage before they will re-finance or lend you additional money on your home.  Be very careful when borrowing additional money against your home because you may find yourself in more trouble than when you started. 

             Once the foreclosure sale is held there may still be one possibility for you to save your home.  Under Alabama law you have a one year right of redemption after your home is foreclosed. This means that if you can come up with the cash payoff plus 12% interest from the date of the foreclosure you may be able to buy your house back from the bank or the person who bought it at the foreclosure sale.  Exercising your right of redemption is tricky and you need a lawyer to make sure you comply with all of the legal requirements.

             If you find yourself in the position of being several months behind on your mortgage payments, call a lawyer before you get a foreclosure notice in the mail.  I have handled consumer Bankruptcy cases for the past twelve years and I can discuss your options with you.

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