Understanding The Chapter 7 Foreclosure Timeline

If you are a current homeowner who has made the mistake of missing your first, second, or third mortgage payment, you may be well behind on your house payments, and perhaps even behind on your credit. You may also have missed some of your costs already. In this case, the lender will likely begin the process of sending you a formal notice of default, or foreclosure. The bank will require you to appear at an assigned court date to give them a chance to negotiate terms with you. The court date is usually set by the lender and will be a date such as your birthday or anniversary.

BANKRUPTCY #1: AFTER A DATE A NO PAY 

Notice is sent to you, usually two weeks before your scheduled court date. If you miss the payments required, the lender can then foreclose on your house, which means that you won't get to buy back the home until at least ninety days after your default has been formally entered into the local register of deeds. If you fail to make payments within a month of receiving the notice, you'll still have time to negotiate a payment plan with your lender before the house is taken. And, if you can't agree, then the sheriff will auction your home and sell it off to the highest bidder.

BANKRUPTCY #2: AFTER A DATE 

The ninety-day period does not finish unless you make all of your house payments on time. If you do not, the foreclosure process moves forward without delay. Your lender may then enter into a default order, which gives him or her the right to start legal proceedings to take possession of your home. The auction date is also crucial because you need to be at your house by the time it's scheduled to begin.

BANKRUPTCY #3: BEFORE A DATE A NO PAY NOD IS ENTERED INTO THE RECORDS OF DEBT. 

This means that your home has already gone through the formal foreclosure process, and a notice of default (or NOD) has been sent to your lender. You then have ninety days in which to pay whatever debt you have left outstanding, including late mortgage payments, taxes, and other costs. In short, a NOD tells you that you have no choice but to move out of your home. If you can't afford to make all of your house payments on time, then your bank has to go through the foreclosure process before entering into any kind of negotiations with you.

BANKRUPTCY #4: AFTER A DATE 

After a month of not making your house payment, your lender may agree with you to pay your debts over a set time. This timeframe generally includes some auctions and the sale of at least one property. If you are unable to continue paying your mortgage, your lender may then repossess your home. During the repossession process, your home will be listed, and the bank will try to sell it. If they can't sell it, they'll be required to let you know, giving you a deadline to make payments (many times just a few days or weeks away).

BANKRUPTCY #5: AFTER AUCTIONS 

Once your home has been sold at an auction, your lender will be able to take back your home. At this point, it's probably a good idea to consult a foreclosure lawyer, who can help guide you through the court system and advise you on how your rights and your responsibilities will change after the auction. Depending on your state, there may be redemption periods following foreclosure auctions in which you can regain ownership of your home again. Your lawyer can help you understand your rights and responsibilities in this matter.

FOREVER MANAGED

After your lender sells your home at an auction, they will usually want to keep the house. This means that they may try to avoid any lawsuits against them, and they may offer you a deed instead of foreclosure, allowing you to move into your new home immediately. If you accept this deed, your lender will continue to make your payments for the balance of the time until your home is finally sold, at which point they become fully responsible for maintaining the property. For this reason, your lawyer will most likely be able to inform you of your options should your home end up in this situation.