What Happens After Home Foreclosure?
Michigan Life After Foreclosure Lawyer
Life After Foreclosure in Michigan
If you are going through foreclosure, you probably have many unanswered questions. What do you do now? Can you stay in your home? Why do you still owe money when you have lost your home? In short: what happens after a foreclosure? Eviction is frightening and so is a poor credit rating and possible deficiency judgments that push you even further into debt.
At Acclaim Legal Services, in Michigan, we understand the emotional and financial turmoil you are experiencing. We provide you with knowledgeable advice about foreclosure and its impacts on you. We also fight to help you find the best options available to you to protect your home and your future.
We are here to answer your questions. Contact our foreclosure attorneys today for experienced advice and representation.
Can I Stay in My Home?
People going through foreclosure often ask: how long do I have in my home? The amount of time you can stay in your home depends on many factors, including the type of foreclosure: judicial foreclosure or foreclosure by advertisement. Usually, the redemption period is six months. This means that you have six months from the time of the foreclosure sale to the time you must leave your home. During those six months, you can pay off your principal loan balance and interest to regain possession of your home.
In some instances, our law firm has worked with clients to negotiate a lease with their mortgage company and give them more time in their home.
What Is a Deficiency Judgment?
Many borrowers believe that, if a bank forecloses on their home, they are not responsible for any of the mortgage debt. This is not always true. If the house sale does not pay off the balance of your loan, your lender may file a claim for post-foreclosure deficiency, also known as a mortgage deficiency judgment.
A deficiency judgment is a court order stating that you are liable for the unpaid balance of the mortgage. Here is an example, if the borrower owes $100,000.00 and the lender accepts a fair market value bid of $75,000.00 at the foreclosure sale, the lender can collect the difference of $25,000.00 from the borrower. This debt is classified as an unsecured debt and can be reorganized and/or partially eliminated through a Chapter 13 or eliminated through a Chapter 7.
What Happens to My Credit After a Foreclosure?
A home foreclosure is more damaging to a credit rating than filing for bankruptcy. You might not be able to get another mortgage for up to four years.
Your credit might also continue to be affected by overwhelming debt caused by your home loan. Your first mortgage company might bring a claim for a deficiency judgment. Furthermore, if there was a second mortgage on your home, the second mortgage company has a legal right to collect on the mortgage unless you have gone through the lien stripping process in Chapter 13 bankruptcy.
Should I File for Bankruptcy?
Bankruptcy helps reset and eventually restore your credit. Since foreclosure is damaging to credit, bankruptcy might be the best option to get you back on your feet. Furthermore, bankruptcy may help you keep your home or organize payment on deficiency judgments.
You should consider the amount of debt that you have — including the number of mortgages on your home — while you determine whether or not to file for bankruptcy. The higher your debt, the more likely Chapter 7 or Chapter 13 bankruptcy will help you.
We're Here to Help
At Acclaim Legal Services, our Michigan bankruptcy and foreclosure lawyers will discuss all of the options available to you and whether it is possible to stop foreclosure on your home. Call us at 866-438-5217 for a free consultation at one of our Michigan law offices in Southfield, Warren, Dearborn or Flint.