If I Live in Atlanta, Georgia and Want to Save my Home From Bankruptcy, Will my Mortgage Company Make it Difficult for me?

Mortgage companies and foreclosure law firms have garnered reputations for being difficult to deal with, but bankruptcy may be an option to help you avoid the sometimes harsh measures used by companies and law firms reclaiming homes during foreclosure.

Photos recently leaked to the New York Times reveal shocking behavior on the part of the Steven J. Baum law firm, a New York firm responsible for about 40% of the state’s mortgage foreclosures last year. According to the New York Times article, members of the firm dressed as homeless people and squatters for Halloween. They also decorated the office to resemble a row of foreclosed properties, including items such as shopping carts, tarps and other structures associated with homelessness. Apparently, the photos were leaked by a former employee of the firm and have to lead to further investigation by New York’s Attorney General, Eric Schneiderman.

The Steven J. Baum law firm has also faced troubling accusations in the past. The Department of Justice previously charged the firm with filing “misleading pleadings, affidavits, and mortgage assignments” in both state and federal courts. To settle the charges, the law firm forked over $2 million, admitted wrongdoing and agreed to change its practices.

Although incidents like those occurring in New York are rare, the foreclosure process can be intimidating. Thankfully, filing bankruptcy can be a helpful alternative for those trying to save their home from foreclosure.

How can Bankruptcy Help Save Your Home From Foreclosure?
  • Filing Chapter 7 bankruptcy temporarily stops foreclosures in Atlanta, Georgia by creating what is called the automatic bankruptcy stay. The bankruptcy stay is a court order that prevents a mortgage company from foreclosing on a home, even it is the day before foreclosure day (which, in Georgia, is the first Tuesday of every month).
How can Chapter 13 Bankruptcy Help?
  • Filing Chapter 13 bankruptcy also uses the automatic bankruptcy stay to stop foreclosures in Atlanta, Georgia. In a Chapter 13 bankruptcy, a debtor reorganizes his or her debts to create a 3 to 5 year repayment plan to creditors. The plan often includes mortgage arrearage that a debtor has accumulated and proposes to pay with no interest or additional late fees.

  • Filing Chapter 13 bankruptcy can make use of a process known as “lien stripping” to allow Atlanta, Georgia homeowners to avoid paying their second mortgage. Lien stripping changes the status of a second mortgage company from a secured creditor to an unsecured creditor and forces the second mortgage company to cancel the security lien on the property.

Are There Helpful Options Available Other Than Foreclosure?
  • Home Loan Modification: There are a few federal home loan modification programs that mortgage companies are currently offering to borrowers, including the Home Affordable Modification Program or HAMP. HAMP has a few requirements for eligibility but, even after filing bankruptcy, a debtor may still proceed with the home loan modification process.

If you are a homeowner facing foreclosure in Atlanta, Georgia, and wish to discuss the options available for keeping your home, contact the Law Offices of Charles Clapp at 404.585.0040 to schedule a free initial consultation.