How to Delay a Foreclosure
Please consult with attorneys for legal advice.
Read on to learn more about why you might want to stall a foreclosure and how to go about it.
Reasons to Delay a Foreclosure
Foreclosures, especially non-judicial foreclosures, often move quickly. In a few states, you could lose your home in as little as about 30 days after a non-judicial foreclosure officially starts. In others, the process might take a few months. A judicial foreclosure could take a few months or a few years, depending on the state and the circumstances. (Read about which states have long and short foreclosure timelines. To find out how long a foreclosure will likely take in your state and situation, talk to an attorney.)
You might want to delay a foreclosure to get more time to:
Ways to Delay a Foreclosure
Many different options exist for potentially slowing down a foreclosure. You might be able to delay the foreclosure process—and possibly get a more favorable outcome—by fighting the foreclosure in court, filing bankruptcy, applying for loss mitigation (a foreclosure alternative), or asking a court to give you some more time in the home.
Challenging the Foreclosure in Court
You might be able to delay your foreclosure by challenging it in court. But you can’t stop the process just because you want more time in the property. You must have some legal reason or valid defense that’s based in good faith for fighting the foreclosure.
Fortunately—or unfortunately depending on your perspective—servicers and lenders often make mistakes when it comes to the foreclosure process. For example, the servicer or lender might:
Applying for Loss Mitigation
Under federal law, if you send the servicer a complete loss mitigation application after foreclosure starts—but more than 37 days before a foreclosure sale—the servicer can’t ask a court for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
Just applying for a foreclosure alternative probably won’t buy you a lot of time though. Generally, the servicer must review your application within 30 days and can proceed with the foreclosure when any of the three conditions mentioned above is satisfied. Also, the servicer doesn’t have to review more than one loss mitigation application from you. But if you bring the loan current after submitting an application, and then submit another one, the servicer must consider your subsequent application.
Some states also have a law that prevents a foreclosure from going forward if the borrower submits a loss mitigation application.
Requesting More Time From the Court
In some rare instances, a judge might delay a foreclosure if you’re facing a significant hardship or you have a lot of equity in the home.
Delaying a foreclosure due to hardship. To get a delay, you’ll have to prove you have a major hardship that involves more than just losing the property, like you have a severe illness. The hardship will also likely have to be temporary, and you must show you can eventually get caught up and resume making regular payments. Otherwise, the judge might decide to let the foreclosure go ahead if it looks inevitable that you’ll eventually lose the property anyway.
Delaying a foreclosure if you have a lot of equity in the home. If you have a large amount of equity in the property, a judge might give you a short reprieve from foreclosure so you can sell the home. If there’s enough equity that a sale will repay the entire debt owed to the lender, a judge might feel that it’s fair to let you sell the property.
Delaying the Foreclosure By Filing For Bankruptcy
You can stop a foreclosure in its tracks—at least temporarily—by filing for bankruptcy.
Chapter 7 bankruptcy. Filing for Chapter 7 bankruptcy will stall a foreclosure, but only temporarily. Generally, you’ll only be able to use a Chapter 7 bankruptcy to save your home if you’re up to date on the loan and you don’t have much equity in the property. So, a Chapter 7 bankruptcy normally won’t stop a foreclosure long term (unless you can get a modification), but you will likely get a delay of a couple of months until the lender can get relief from the automatic stay. (If you already filed for bankruptcy within the past year, however, the stay could be limited to 30 days or eliminated altogether. To learn more, see Nolo’s article Losing the Automatic Stay for Repeat Bankruptcy Filings.) You shouldn’t file a Chapter 7 bankruptcy just to delay a foreclosure. But if you have a lot of other outstanding debts that you can discharge (eliminate) through the bankruptcy process, filing for bankruptcy might make sense.
Chapter 13 bankruptcy. If you want to keep your home, a Chapter 13 bankruptcy might be a better option for you. In a Chapter 13 bankruptcy, you can get caught up on the overdue payments over time through a repayment plan. Again, though, if you’ve repeatedly filed for bankruptcy in the past year, you might not be entitled to a stay.
Talk to an Attorney
You’ll probably need a foreclosure lawyer’s assistance to help you figure out to whether the servicer made a mistake in the foreclosure process or violated the law, as well as to help raise this issue in court. In a judicial foreclosure, you have the opportunity to file an “answer” (a response to the suit); but if the foreclosure is nonjudicial, you’ll have to file a lawsuit to get into court. You’ll also likely need a foreclosure attorney’s help if you want to request more time from the court due to a hardship or your equity in the home. (To learn more about how a foreclosure attorney might be able to help you, see When Should I Hire a Foreclosure Attorney?)
If you want to learn more about whether filing bankruptcy is appropriate in your situation, consider talking to a bankruptcy attorney. To learn more about applying for loss mitigation, consider talking to a HUD-approved housing counselor.