What Is Foreclosure?

Foreclosure is a process whereby a mortgage lender/home owner can take back real estate if borrowers stop making payments on their home mortgages and fail to attempt to get caught up or otherwise resolve the issue of arrears with the lender.

Utah Foreclosure Process

Under Utah law, a home lender holding a Deed of Trust recorded against a Debtor’s home can complete foreclosure proceedings within about 4 months after submitting proper notice. The filing of a Chapter 13 case stops a foreclosure sale immediately upon filing. If you wait until after the foreclosure sale has occurred, it is often impossible to reverse the foreclosure and your house will be lost. As soon as you receive notice that the Lender plans to start the foreclose process, immediately consult with an attorney

Chapter 7 & Chapter 13 Can Preserve The Equity In Your Home

Individuals who have a great deal of debt and are contemplating debt consolidation by borrowing against their homes should instead seriously consider bankruptcy options available to them under Chapters 7 and 13. Incurring long-term indebtedness against an individuals’ primary residence often results in excessively high payments which the individuals may be unable to sustain over the duration of the loan. If the individuals are forced to incur additional debt after borrowing against their homes, or if they are unable to borrow sufficient funds against their homes to consolidate all of their debt, they are vulnerable to losing their homes upon any change in their financial situation. Chapters 7 and 13 often permits individuals to discharge huge amounts of unsecured debt and get out of unattractive and unwanted secured debt.

Homestead Exemption Protects A Large Amount Of The Equity

The Homestead Laws in the State of Utah were amended in 2008 and are very favorable to bankruptcy Debtors. The present Homestead Exemption for a primary residence is $30,000.00 per individual and $60,000.00 per couple. There are many complex nuances and details to the Homestead Exemption you should study and discuss with an attorney. Instead of borrowing against their homes, Debtors who are current in payments on all loans against their home, can file Chapter 7 bankruptcy, eliminate most of their other debt, and emerge from Chapter 7 with the equity in their homes intact by claiming up to $30,000.00 to $60,000.00 of the equity in their homes exempt. If you are ineligible for Chapter 7, Chapter 13 options are equally attractive.

If the Debtors’ home equity exceeds the limits of the Homestead described above, a Chapter 7 option would definitely not be desirable to them as their homes could be taken and sold by the Bankruptcy Trustee. Debtors with equity exceeding $30,000 per individual or $60,000 per couple, or any equity not protected by the Homestead Exemption should consider filing Chapter 13 to resolve their financial difficulties.

DISCLAIMER

BANKRUPTCY HAS BECOME INFINITELY MORE COMPLEX OVER THE YEARS, ESPECIALLY FOLLOWING A MAJOR CHANGE IN THE BANKRUPTCY CODE IN 2005. IT IS IMPORTANT TO REVIEW YOUR OPTIONS WITH AN ATTORNEY. NO INFORMATION OR MATERIALS CONTAINED HEREIN ARE INTENDED TO CONSTITUTE LEGAL ADVICE, AND ARE NOT APPLICABLE TO ANY SPECIFIC SET OF FACTS, ESPECIALLY AS TO ANY INDIVIDUAL’S PERSONAL SITUATION. THE INFORMATION CONTAINED HEREIN NOR THE PERUSAL OF IT DOES NOT ESTABLISH NOR CONSTITUTE AN ATTORNEY-CLIENT RELATIONSHIP WITH UTAH BANKRUPTCY PROFESSIONALS OR ANY OF ITS ATTORNEYS.

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