Facing foreclosure is scary – we can help!

You put your heart, soul, and money into your home and now the mortgage company wants to foreclose and take it all away.  Whether you have just gotten a warning letter about missed payments, received a summons or had a judgment entered – it’s not too late!!!  Now is the time to contact  our experienced attorney to discuss your options to stop the foreclosure process and save your home.

The bankruptcy system contains a variety of tools that our experienced New York and New Jersey licensed attorneys can use to save your home.  You may be able to fix the arrears over a period of time, or use the time to get a loan modification, if you qualify.  Time, however, is NOT on your side.  Every day you wait, the back payments grow.  Now is the time to set an appointment to speak with our attorney.  We are available via video conference or telephone for your safety.

Facing foreclosure can be one of the most devastating experiences in a person’s life, whether the foreclosure results in losing a home or a commercial property where you have been running a small business for years or even decades. Individuals and businesses can suffer financial hardships for a wide range of reasons, and the pandemic has resulted in economic difficulties for many New Jersey residents. From financial hardship caused by unexpected medical bills to economic downturn, the possibility of foreclosure can affect a wide range of people in the state, and it is important to understand what your options might be to avoid foreclosure. In order to take steps to defend against foreclosure, it is critical to learn more about how foreclosures work. Our New Jersey foreclosure attorney can provide you with more information about the foreclosure process and can speak with you today about your circumstances.

What is a Foreclosure in New Jersey?

What is a foreclosure? According to USA.gov, “foreclosure occurs when a homeowner is no longer able to make mortgage payments as required,” which “allows the lender to seize the property, removing the homeowner and selling the home, as stipulated in the mortgage contract.” Foreclosures can also occur in commercial properties when the business owner cannot make payments on the loan for the commercial structure and a default occurs. 

New Jersey is a judicial foreclosure state. This means that, in order for any lender to repossess property through a foreclosure, the lender must go to court. Under the New Jersey Fair Foreclosure Act, all residential foreclosures must go through a specific process in order for a lender to foreclose on the property and to force a homeowner out of their house or condominium. The Fair Foreclosure Act requires the following for residential foreclosures in the state:

• The lender must give the debtor 30 days’ notice in writing before initiating a foreclosure action; 
• The notice must “clearly and conspicuously” provide the debtor with information about financial assistance or other potential options to avoid foreclosure; and
• The lender must again send a written notice if 180 days pass and no foreclosure action is taken if the lender plans to move forward with a foreclosure.

Steps in a New Jersey Foreclosure

How does the foreclosure process work, and what should you expect? Under New Jersey law, foreclosures generally proceed like this:

• A lender will file a foreclosure complaint at least 30 days after providing written notice to the debtor about the intention to foreclose;
• You will be served with the foreclosure complaint, and you will be named as the defendant in the lender’s foreclosure lawsuit, at which point you will still have options to avoid a foreclosure including the possibility of resolving the default by going through New Jersey’s foreclosure mediation program;
• After being served, you will have 35 days to file an “answer,” which is your response to the lender’s foreclosure lawsuit, and which should be prepared with assistance from a foreclosure lawyer in New Jersey;
• The court can record an entry of default if you do not file an answer to the complaint, or if you do not contest the terms of the complaint setting forth grounds for the foreclosure;
• If you file an answer in which you contest the terms of the foreclosure, your case will go to court;
• With an entry of default or no contest, a final judgment will be entered, and the court will allow a sheriff’s sale to occur (which will also happen if you go to court and lose your case);
• A sheriff’s sale of the property will have to occur within 150 days, but you may be able to postpone the sale if you are still trying to keep your home;
• Once the property is sold, you have the right to redeem the property within the 10-day period following the sale of the house;
• If you do not exercise your right to redeem, the lender will receive the proceeds from the sale up to the amount owed on the mortgage.

How Bankruptcy Can Stop a New Jersey Foreclosure

Reorganization bankruptcy is a common tool to stop a foreclosure and allow a homeowner to remain in their property, or a business owner to keep their commercial property and continue operating their business. Both Chapter 13 and Chapter 11 bankruptcies are types of reorganization bankruptcy. Chapter 13 is for individuals. Chapter 11 is used largely by businesses, but it can also be used by individuals who have too much debt to qualify for Chapter 13 bankruptcy.

How does a bankruptcy reorganization stop a foreclosure and allow you to keep the property?

First, the automatic stay applies to the case as soon as you file for bankruptcy, and it stops the lender from taking any foreclosure actions or moving forward with an existing foreclosure case. Then, through the repayment plan, the debtor can catch up on payments owed to the lender and keep the property. Avoiding foreclosure and retaining the property is one of the most common  reasons for reorganization bankruptcy filings, especially for individuals in New Jersey.

With a Chapter 7 bankruptcy, the foreclosure process will automatically stop, but it will not allow a debtor to keep the property.

Options for Defending Against a New Jersey Foreclosure

When you are facing foreclosure, it is important to know that you may have a number of options for avoiding foreclosure. Some of those options involve keeping the property, while others will require you to give up the property. Since foreclosure can be extremely damaging to your credit, it is often beneficial to avoid foreclosure if you can, even if it means you cannot keep your home or your business space. The following are among the most common options for defending against foreclosures in New Jersey:

• Loan modification: With a loan modification, you and the lender can reach an agreement in which your loan will be modified so that your payments are more affordable. Loan modifications can take different forms. In some cases, modifications may involve lower payments. Other modifications might involve extending the life of the loan so that you are making more payments overall, but the amounts of each payment will be lower.
• Reorganization bankruptcy: Like we discussed above, a reorganization bankruptcy can allow you to stop foreclosure and keep your property. Chapter 13 bankruptcies are particularly common for individual debtors who are struggling with home mortgage payments and need help catching up and getting back on track with their mortgage.
• Short sale: In a short sale, the debtor and the lender agree for the debtor to sell the property at an amount below what is owed, and the lender typically agrees to forgive any remaining debt. With a short sale, you cannot keep the property, but you will avoid having your credit take a major hit with a foreclosure.
• Deed in lieu of foreclosure: This option involves signing over your house to the bank in order to prevent the foreclosure from occurring. With a deed in lieu, it is critical to work with a lawyer who can negotiate with the lender to forgive the mortgage debt you owe.

Contact an Experienced Foreclosure Lawyer in New Jersey

When you are facing foreclosure, or when you are unable to make mortgage payments on residential or commercial real estate, it is critical to begin working with an experienced New Jersey foreclosure attorney as soon as possible. There are many ways in which you can defend against foreclosure in New Jersey, with options ranging from a short sale to a reorganization bankruptcy. Our firm can speak with you today about the possibilities that may be available.