Facing Foreclosure

What to do if you are Facing Foreclosure in New Jersey

We are bankruptcy attorneys. We help people obtain debt relief under the Bankruptcy Code and other laws.

Foreclosure Advice

First, don’t panic, but act now. Take control by starting to act and plan.
The thought of losing your home is scary for anyone. However, your best chance of getting the best result for you comes if you start planning and preparing right away to increase the chances of the best possible outcome among the alternatives available to you.

Watch out for scams. There are companies out there who promise to “Stop Foreclosure” “Save My Home” or “Credit Repair” but without bankruptcy.While bankruptcy is not the only way to do this, you must be careful, and you should get qualified advice about all your choices. A Chapter 13 Bankruptcy is your legal right and it is proven effective, with the right planning and the right legal advice. There are government programs, but to use them you need to know all your rights. We do not sell bankruptcy. We sell solutions. To learn more, please see our article on Foreclosure Scams and Ripoffs

1. Collect and start keeping records. Start by collecting together and keeping all your records about your home and your mortgage loan. This includes all your loan papers and legal papers, any appraisals, any notices from your mortgage lenders which you may have gotten and anything you get in the future. Start taking notes of all your dealings with the lender, and start keeping proof of all payments you make. You may lose important rights if you do not keep these papers!

2. Assess your budget and your priorities, to see how well you can afford to pay the mortgage or pay back any past due payments. (Incredibly, many people, under pressure from bill collectors, will pay credit card bills, leaving them no money to pay the mortgage.) If you want to keep your home, the mortgage payment is more important. You have choices, and making the right choices early will increase your chances that things end up the way you want.

A personal and household Budget is your key. Spend the time to honestly and carefully look at what income you have coming in, and what are your expenses. A carefully prepared budget tells you, and anyone from whom you seek advice, what you can afford to do, and is critical to deciding what options are in your best interest. You can make your own, or download our questionnaire {click here} and use the budget form in it, or use our Excel spreadsheet. {click here for spreadsheet}

3. Find out what your home is worth. Most realtors will give you a complimentary “Comparative Market Analysis”. Tell them that you want as accurate an idea of your home’s value now, in its current condition. This is another important part of the picture.

4. Don’t just spend the unpaid mortgage payment. If your lender is no longer accepting payments, consider putting the amount of each monthly payment aside in a savings account. Just because the lender will not accept your payment does not mean you should spend it, unless there is another pressing need (like paying for food, medical care, or other critical needs. If you do decide to save your home by bankruptcy or another means, having some of the back payments will be helpful.

5. Most importantly, seek experienced advice right away to find out your best options as soon as possible. Keep in mind that doing nothing will make things worse. An experienced professional adviser should review with you all your options and be able to tell you the pluses and minuses of each.

Keep an open mind and consider all your choices. Sell? Refinance? Do a deal with the lender to catch up? Bankruptcy? Not all of them may make sense for you, or be possible. Again, it depends on what you can afford to do, and what will work for you in the long term.

Understand the foreclosure process.

Foreclosure is a process, through legal proceedings, for a lender to get paid back out of the value in your home. This is, however, a multi-step process that takes many months. The loss of your home happens only at the end. The sooner you start acting, planning and start getting professional advice, the better your chances of getting the best result for you. Do not delay as generally the longer you wait, the fewer or more expensive your options become.

The first step in New Jersey foreclosures of your personal residence is the “30 day Cure letter”. This is a letter that tells you you are behind in your payments, and gives you 30 days to bring the loan current. If you bring the loan current, the process stops. If you cannot do this, then the lender will start the foreclosure lawsuit, and will usually refuse to accept further payments. Before this happens, get advice. Even if you can “work out” an arrangement with the lender, you should get advice and make sure any arrangement is confirmed in writing.

Assuming you have not brought the loan current after the deadline in the Cure Letter, the lender will then file a Foreclosure Complaint. After this, the filed Complaint is served on you, by mail or by other means. Do not ignore legal notices you may receive in the mail.

However, before then you will probably start getting a lot of mail from lawyers, real estate brokers, or mortgage lenders promising to help you. These people may or may not have your best interests in mind and may be trying to sell you something. See our page on foreclosure scams. Get independent qualified legal advice, from someone you trust.

You may also get notice that you can mediate (or sit down with a neutral third party to try to settle and avoid foreclosure). This may or may not result in your being able to avoid losing your home. We strongly recommend you meet with a qualified attorney with experience in both bankruptcy and the mediation process (like our firm), and that you have a clear idea what you can afford and what are your alternatives.

In some cases, you may receive a notice of a 6 month forebearance. This is intended to give you time to discuss or make other arrangements.

If you do not file an Answer, then after about 35 days from the date you were served with the papers, the lender’s attorney will be start the process of applying for a judgment by default. This process will probably require that you get another notice by certified mail that the lender is applying for judgment. The lender’s attorney then has to file papers with the Superior Court Clerk in Trenton to get a judgment. After these are processed, the clerk issues the Foreclosure Judgment. Entry of this judgment takes place without any further notice to you, and might take a long as two months after you were served with the Complaint. The Foreclosure Judgment is the legal paper that gives the lender the legal right to sell your home. This judgment may take some time for the lender to get due to backlogs in Trenton.

The next notice to you will be that a Sheriff’s Sale has been scheduled for your home. This notice goes to the home being foreclosed on. The lender’s attorney sends the Foreclosure Judgement to the Sheriff in your county so he/she can schedule a Sheriff’s sale. Then there will be a notice in a local paper of the first scheduled date of your sheriff’s sale. Depending on the backlog of sheriff sales in your county, it might be months until the first sale date. IF YOU HAVE NOT ALREADY DONE SO, YOU MUST SEEK LEGAL ADVICE, AS SOON AS YOU RECEIVE NOTICE OF A SHERIFF’S SALE.

You are allowed to request postponement of the Sheriff’s sale twice. Each postponement is for two weeks at most. These requests should be made in writing, with a copy to the lender’s attorney. You want to make sure to confirm the postponement date with the Sheriff.

Then there is the Sheriff’s Sale, usually at the Courthouse or at the Sheriff’s office. This is an auction, in which the lender may buy your property back, or there may be bidding with the highest bidder becoming the new owner of your home. Once a Sheriff’s Sale takes place, you lose important rights. The Sheriff can deliver a deed to the purchaser but only after waiting ten days after the sale date. You still have important rights, if you act before that ten days is up. Get advice from an experienced attorney, right away.

After the deed is issued, at least ten days after the Sheriff’s Sale, the property is no longer yours. The new owner (which may be the foreclosing lender) will want to sell the property and will most likely want you out. At this point, you face the prospect of eviction, and you can no longer “save” the home.

As you can see, you have time to act, but you should not delay. All the above applies for mortgage foreclosures of a residence in New Jersey. This summary is to give you a general idea about how one type of foreclosure usually works. It may not apply to you and you must get legal advice about your specific situation.

How we can help you.
Please read an important required disclosure Feel free to call us at (856) 596-2828 . The initial telephone consultation is always free. Usually, we will want to see you in the office. To make the best use of that meeting, we urge you to download and fill out our client questionnaire, (click here). Even though the questionnaire is for bankruptcy, that does not mean a bankuptcy is right for you. However the information in it is needed for us to help you choose what works best for you, no matter what you do.

We serve all of South Jersey, including Camden County, Burlington County, Gloucester County, Atlantic County, Atco, Barrington, Berlin, Cherry Hill, Collingswood, Haddonfield, Marlton, Medford, Mount Laurel, Southampton Voorhees, Westmont, West Berlin, Winslow Township and surrounding areas

Steven R. Neuner has the experience to help you plan and take control of the situation. He has filed or presided over hundreds of bankruptcy cases and proceedings over the past 24 years, and has helped people in trouble save their homes or save the value in them. He also serves as a civil and foreclosure mediator. For more about him and his background click here

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