In 2019, there were about 493,066 properties with foreclosure filings, representing 0.36 percent of all housing units in the United States. Due to nonpayment, your mortgage lender can repossess your house legally through foreclosure. You may think you have no options to save your home if you have been served with a foreclosure notice. However, filing bankruptcy will delay the foreclosure process, giving you time to consider your options.

Our attorneys at The Winter Law Group are highly experienced with the foreclosure and bankruptcy process and can help you fight to keep your property. We will explain your options and strategize a plan to stop the foreclosure. Contact us for a free one-on-one consultation with an experienced California bankruptcy attorney. We proudly serve clients in Fresno, California, and the surrounding areas of Clovis, Visalia, Madera, Madera County, Merced, and Merced County.

Reasons for Foreclosure

A foreclosure is a legal process through which your mortgage lender or bank repossesses the property or obtains ownership of your home. Common reasons for foreclosure include:

• Nonpayment
• Adjustable-rate loans
• Unemployment
• Credit card debts
• Critical illness and medical expenses
• Divorce
• Multiple bills
• Sudden relocation
• Death

When payments are delinquent, it will trigger the notification phase of the foreclosure process. 

Foreclosure Process

There are two types of foreclosure, including judicial and non-judicial. Judicial foreclosure is supervised by the court with formal legal proceedings, whereas non-judicial foreclosure is not court-supervised. Non-judicial is the most common residential foreclosure in California. The foreclosure process in California involves the following steps:

Notice of Default

To initiate the foreclosure proceedings, the trustee or lender records a notice of default with the county clerk's office. The notice of default will include details regarding the nature of the breach and how it can be resolved. The borrower will have three months to resolve the default.

Notice of Sale

If the borrower fails to resolve the default, the trustee or lender records a notice of sale. The notice of sale will contain details such as property address, time, and place of the sale. The foreclosure sale can only occur 20 days after the end of the three months.

The Foreclosure Sale

Pursuant to Cal. Civ. Code § 2924g, the foreclosure sale must be held between the hours of 9 a.m. and 5 p.m. on any business day, Monday through Friday. The highest bidder will buy the property. In a non-judicial foreclosure, the borrower has the right to reinstate at any time until five business days before the sale.

Legal Rights and Options

Options to delay or stop foreclosure include:

Delaying Foreclosures With Bankruptcy

When bankruptcy is filed, an automatic "stay" goes into effect that prevents all collection activities by creditors — including foreclosure. While filing bankruptcy does not guarantee you will stop the foreclosure, it will delay the process, so you have time to consider your options.

If keeping your home is important to you, the Winter Law Group can help you determine whether filing bankruptcy can help you accomplish that goal. We will review your overall situation, providing honest answers so you can make informed decisions.

File a Lawsuit

A non-judicial foreclosure can be delayed or stopped by filing a lawsuit against the lender to challenge the foreclosure. To be successful, the plaintiff would have to prove to the court that the foreclosure can't happen because of the lender:

• Didn't act in compliance with state mediation requirements
• Failed to follow all of the necessary steps in the foreclosure process
• Violated a state law
• Can't prove it owns the promissory note
• Made some other severe mistakes

Loan Modification

It may also be possible to delay a foreclosure by applying for a loan modification. California law prohibits banks or lenders from proceeding with a foreclosure while there is a pending loss mitigation application. This is referred to as dual tracking. If your loan modification application is approved, the foreclosure will be permanently stopped, provided that you stay current with the modified payments.

What About Buying a House In The Future?

Many mistakenly believe that filing bankruptcy or experiencing foreclosure prevents them from ever buying a house again. There are several key things you will need to obtain a loan to buy a home. Stable income and appropriate down payment are still the most important. Low debt is also very helpful. Bankruptcy provides the opportunity to get rid of debt and begin anew. Once free from debilitating debt, you can re-establish your credit and continue or increase saving to buy a home in the future.

Legal Counsel Can Help Protect What Matters Most To You

If you cannot avoid foreclosure or wish to let go of the property, the Winter Law Group can help you take the necessary precautions to minimize any future liability regarding liens, property tax obligations, or foreclosure sale deficiency debt.

In many cases, people can keep their homes by getting current on past-due mortgage payments in Chapter 7 or by including a first or second mortgage within a Chapter 13 payment plan. As long as you can demonstrate your ability to continue making payments, you can most likely protect your property from foreclosure.

Filing Bankruptcy Can Give You Time to Consider Your Options

Filing for bankruptcy can stop or delay foreclosure and give you time to consider your options. Contact the Winter Law Group today to schedule a free one-on-one consultation. Our experienced team can offer you the comprehensive legal guidance and advocacy you need to navigate key decisions. We are proud to serve clients across Fresno, Clovis, Visalia, Madera, Madera County, Merced, and Merced County, California.