What Is Involved In Foreclosure?
Apr 10, 2013
Declaring bankruptcy is a stressful thing to do, and with so many details, documents, rules, regulations and various meetings, it can be a nightmare to comprehend everything going on. The most upsetting part of bankruptcy is the threat of foreclosure.
In general, foreclosure is when a lender takes action to repossess their property; property they have a mortgage against resulting from money lent to the debtor. In the case of a mortgage, the home was considered to be the collateral. Thus, if an individual stops making payments on their mortgage, the financial institution holding the paper(s) on that property has the right to take the property back on default.
The foreclosure process does vary slightly from state to state, and for those living in Iowa, they will want to discuss the steps with an experienced Iowa bankruptcy lawyer. In general, the overall process is the same, and that is once a debtor has not paid for 90 days, a notice of default is filed with the county to initiate foreclosure. There is a grace period of sorts in this process, where the debtor does have the right to make their mortgage current by catching up on all the payments, or at the very least, working out a plan with the lender.
If neither of these two options is viable, the financial institution will put the home up for auction, which typically takes place on the county courthouse steps. The highest bidder takes the home, and the bidding process is carefully monitored by a bank trustee, whose goal it is to cover their mortgage, or at least limit their loss. If this is not possible, the bank trustee bids until they secure the home back, with plans to fix it and put it back on the market.
Bankruptcy can be a very confusing process and even though it is possible for a debtor to file their own bankruptcy papers, it is not advisable to do so. If something is not done properly, according to the law, the debtor takes a real chance that they could have their petition dismissed, or they could be charged with fraud. There are far too many ins and out for a debtor to take the chance on doing the wrong thing. For this reason, consulting with an Iowa bankruptcy lawyer is highly recommended.
Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact an Iowa bankruptcy attorney, Iowa bankruptcy lawyer, or set up an appointment, visit http://www.iowachapter7.com or call 1.877.888.1766.
309 Court Ave., Suite 805
Des Moines, IA 50309
Offices in Des Moines, Cedar Rapids, Waterloo, Mason City, and Vinton.