Foreclosure Solution in Dothan, Alabama We Provide a Path Forward
Do you live in Dothan, Alabama or the Surrounding Area of Wiregrass? Are you in the midst of foreclosure proceedings? Have you fallen behind on your mortgage payments?
Foreclosure can be a challenging time for any family or homeowner. Equally disconcerting are the circumstances that lead to the inability to make mortgage payments. The loss of employment, lay-offs, furloughs, lost income, sudden expenses, and even bankruptcy can have anyone struggling to keep a roof over their heads.
In the state of Alabama, the law requires due process to be exercised before implementing a foreclosure. For you, this means you have a certain window of time at stopping foreclosure.
Halting foreclosure will not be easy and is a complicated process. To ensure the best possible results, you will need an experienced Alabama-based lawyer who is well-versed in foreclosure proceedings. In Alabama, the Gil Law Firm has helped thousands keep and stay in their homes. We have assisted many homeowners in halting foreclosure.
Choose Gil Law if you plan on appealing foreclosure or negotiating your situation with the courts and the bank.
Foreclosure in Alabama
The Federal Government has luckily issued several moratoriums on several available debt payments in light of the COVID-19 pandemic. In other words, if you have student loans or even a mortgage, it is likely that payments are deferred to a future date.
However, there are two caveats to this:
First, foreclosure relief only applies to federally-backed home loans. Hence, if you took out a mortgage from a private lender, the relief does not apply to you.
Second, the moratorium is effective only until the 1st of June 2021. Unless there is an extension, you will have to resume mortgage payments after this date.
In any case, foreclosure prevention is still in your best interest. Foreclosure in the state of Alabama is not different from that of many other states. What differentiates Alabama from other states is the foreclosure process.
In Alabama, the process will depend on the type of foreclosure you are facing. There are two types. One is a judicial foreclosure and the other is a non-judicial foreclosure.
How Does the Foreclosure Process in Alabama Work?
The foreclosure process depends greatly on whether lenders proceed via judicial or non-judicial foreclosure. In most cases, lenders will opt for non-judicial foreclosure due to its speed and cost-effectiveness. Here is why:
A judicial foreclosure is a court-mediated process. In a judicial foreclosure, lenders file a suit against the person who fails to regularly make mortgage payments. The goal for the lenders is to obtain permission to sell the foreclosed property. Once the lender files the lawsuit, the court issues a notice to the borrower. The borrower has to respond in writing if he or she wishes to dispute the suit.
As a court proceeding, a judicial foreclosure takes time. This is where a non-judicial foreclosure comes in. It is a less costly way for a lender to be able to sell a foreclosed property in the state.
In a non-judicial foreclosure, the proceedings are between the lender and the borrower (you). The proceedings do not require the lender to go to court for the foreclosure. He or she does, however, need to notify you of the foreclosure.
This is done with a breach letter. You will likely also receive an invitation to challenge the foreclosure. You will be given 30 days before the date of the foreclosure sale to make your case against it.
We Can Protect Your Rights in Alabama
We Can Protect Your Rights in Alabama
Alabama state law requires mortgage lenders to provide you with an opportunity at stopping foreclosure. Foreclosure protection measures in Alabama are a way for loan owners and borrowers to agree on alternative ways to pay off a mortgage. This way, losses are minimized for both parties and you will be able to remain in your home as you continue to pay your mortgage.
With foreclosure laws as they are, you are afforded the following rights during foreclosure proceedings. We can help you with:
- Ensuring that you receive a breach letter
- Loss mitigation proceedings
- Taking part in foreclosure mitigation proceedings
- Determining and negotiating alternative repayment options
- Filing for bankruptcy
- Appealing foreclosure
- Receiving money from a foreclosure sale if you have built enough equity prior to the foreclosure
Stopping Foreclosure: Your Options
Regardless of the process, you can either stop or put off the foreclosure of your home in several ways.
The most common form of bankruptcy is Chapter 7 bankruptcy, which involves converting your existing assets to cash (liquidation). The cash generated will then pay off your creditors, including your mortgage provider.
Not only is Chapter 7 bankruptcy the most common, but it is also the one applied for by most. The reason is that the cash generated ends up paying creditors, allowing you a “clean slate” with these lenders.
To file for Chapter 7 bankruptcy, you need to:
- Undergo credit counseling
- Submit yourself to a “means test” for the bankruptcy courts to determine your ability to pay the remainder of your unsecured debts
Of course, it is possible to be disqualified from Chapter 7 bankruptcy. Disqualification often happens after failing the means test. Failure usually indicates that your monthly income is well above the state median income.
For homeowners with a steady income, we usually recommend filing for Chapter 13 bankruptcy. Chapter 13 bankruptcy involves no liquidation of your assets to pay off your creditors. Instead, it allows you to pay your mortgage in monthly installments. Payment can go on for three to five years after approval.
There are several advantages to filing for Chapter 13 bankruptcy:
- Creditors temporarily cease collection notices and activities
- A viable option for halting foreclosure
- You will be able to “spread out” your payments into manageable (and often affordable) monthly installments
- It is a good way to prevent wage garnishment
Filing for bankruptcy is the most readily available option for many. However, declaring bankruptcy can leave a mark on your credit history that can severely affect future loans. Bankruptcy can also hinder your ability to seek financing for anything in the future.
A loan modification can give you many of Chapter 13 bankruptcy’s advantages minus the negative credit history tarnishment. A loan modification will allow you to distribute the amount you need to pay into monthly installments.
On a loan modification, you can, alongside your lawyer, negotiate other arrangements like:
- Lowering interest rates
- Agreeing on a fixed interest rate
- Extending the period or duration of your mortgage
Not only is Chapter 7 bankruptcy the most common, but it is also the one applied for by most. The reason is that the cash generated ends up paying creditors, allowing you a “clean slate” with these lenders.
To file for Chapter 7 bankruptcy, you need to:
- Undergo credit counseling
- Submit yourself to a “means test” for the bankruptcy courts to determine your ability to pay the remainder of your unsecured debts
If you have taken out a mortgage with a Federally approved loan, there are housing relief programs that can help you with foreclosure.
The housing relief programs are government-funded and benefit those on Federally backed mortgages. Some of these programs are:
- Hardest Hit Alabama
- FHA Programs
- USDA/RD Mortgage Aid Programs
- Veterans Association foreclosure assistance programs
Generally, lenders in Alabama are bound by law to provide you with an opportunity at loss mitigation. Loss mitigation is often available as part of any mortgage in the state. Loss mitigation aims to:
- Reduce the losses you will sustain following the foreclosure decision
- Minimize the losses of your loan owner
To meet both goals, you can apply loss mitigation to any of the following:
- An alternative repayment plan you can afford to follow
- Forbearance or deferment on your mortgage
- Altering certain parts of the mortgage agreement to fit your circumstances
Applying for loss mitigation for your foreclosure requires several documents, which include:
- A completed and signed application form for loss mitigation
- Documents showing the property’s information
- Copies of financial statements or bank records
- Your latest payslips or stubs
- The most recent copy of income tax returns
- An affidavit stating the reasons and nature of your financial difficulties
You must submit as many documents as possible proving your financial difficulties alongside your application. Submitting a complete loss mitigation application not only facilitates proceedings, but can also put off the foreclosure sale date.
Option Six: Short Sale of Your Property
A short sale allows you to sell your home for a lower price. Often, the selling price is lower than the remainder of the amount you need to pay on your mortgage. The main selling point of a short sale is that you get to avoid foreclosure and have some money after your sale.
A short sale also helps you recover part of the amount you owe as money in your account. This benefits not only your financial standing, but also your credit history.
Option Seven: Deed In Lieu
When all else fails, a deed in lieu is another way to stave off foreclosure. A deed in lieu works by transferring the property’s title back to the owner. It will almost seem as though you just returned your home to the property owner.
A deed in lieu transaction should be your last resort. Despite succeeding most times, there are risks, especially if the amount you owe is worth more than the actual property.
Are You Under the Threat of Foreclosure? Hope is Within Reach - Contact Us Today
At Gill Law, we specialize in foreclosure protection that is transparent with reasonable rates. Whatever option you choose for foreclosure protection, we can provide you with all the information and assistance to get you through this tough time.
For foreclosure protection, you can trust in Alabama, call us now at Gill Law!