How to Stop a Knoxville Home Foreclosure by Filing a Chapter 13 Bankruptcy Petition
Are you a homeowner in the Knoxville metro area facing mortgage foreclosure? Like many areas of Tennessee, Knoxville has been hard hit by declining home values. Unprecedented numbers of homeowners in eastern Tennessee are facing foreclosure due to payment delinquencies and rising adjustable rate mortgages. If you have fallen behind on mortgage payments and want to save your home, Chapter 13 may be an option for your.
Once your mortgage company starts foreclosure proceedings, it is unlikely that they will voluntarily stop the process. Under Tennessee law, a mortgage company can start foreclosure proceedings once you are placed into default status because of missed payments. Usually, mortgage companies will wait until you are two or three months behind before they put you into default status and accelerate the mortgage. Acceleration means that the mortgage company has declared the entire payoff balance due and payable.
Because mortgage companies are subject to federal and state banking regulations, changing the status of your account from “delinquent and accelerated” back to “current” is complicated and time consuming. Further, a “delinquent and accelerated” mortgage account will be referred to a foreclosure law firm that has its own case management process. Once the foreclosure process starts, our experience has been that most mortgage companies are not set up to arrange side deals with consumers who promise to cure delinquencies on a case by case basis.
You May Lose Your House to Foreclosure in Tennessee as Fast as 30 Days After Foreclosure Notice is Published
Tennessee is a “non-judicial foreclosure” State, which means that your mortgage company and its foreclosure lawyer do not have to file a lawsuit and go before a judge to secure a judgment that will authorize them to take possession of your house through a foreclosure. The mortgage note you signed when you purchased your house includes a provision whereby you have agreed that the lender need only advertise a notice of the pending foreclosure sale of your property for four consecutive weeks in the official legal newspaper of the county where you live. This foreclosure notice serves to give you official notice of your right to redeem the property by paying the entire balance due. This notice also advises you that your property will be sold on the courthouse steps. Click here to learn more about Tennessee foreclosure law.
Once your account has been referred to a foreclosure law firm, Chapter 13 bankruptcy becomes your only real option to stop the foreclosure and to save your house. Chapter 13 will stop any pending foreclosure up until literally the minute before your property is sold on the courthouse steps. It does not matter that the lender or lender’s counsel may not have actual notice of your Chapter 13 filing. Unless the bankruptcy court has ruled to limit the applicability of the bankruptcy stay in your case, your Chapter 13 filing will invalidate any foreclosure sale.
Contacting Clark & Washington as soon as you learn of a pending foreclosure remains your best course of action. Although we can handle emergency filings, we can serve you better if we have time to carefully review your intake questionnaire, meet with you and discuss your various options. However, if, for whatever reason, you you have an emergency and a pending foreclosure within the next few days, our firm is uniquely qualified to represent you in an emergency.