Mar 23 My Home is Going for Auction – What Can I do?
Ways to Stop Foreclosure When Served with a Notice of Sale
File for Bankruptcy Protection
A homeowner can file a Chapter 7 or Chapter 13 bankruptcy and this will automatically stop the sale. Today, an attorney can file your petition electronically with the court, so in essence a bankruptcy can be filed the evening before the scheduled auction, or even the morning of. After filing for bankruptcy, your attorney will immediately notify the bank’s lawyer, the referee and the foreclosure part in the specific court where the auction was to be held to put everyone on notice of the bankruptcy filing. Once the bankruptcy is filed the auction will not proceed.
File an Order to Show Cause in the Foreclosure Litigation
The second method by which a homeowner can stop an auction sale is by filing an Order to Show Cause (“OSC”) asking for a Temporary Restraining Order staying the sale until your application is adjudicated. An attorney can file an OSC with the Court on several grounds, and if the Judge signs the Order this will stay (pause) the auction sale. The most common grounds upon which to seek such relief is to demonstrate a lack of service of process of the summons and complaint on the homeowner, and/or the bank’s failure to meet certain pre-foreclosure conditions (such as the filing of the 1304 notice). The specifics of each ground is beyond the scope of this guide and should be discussed with your foreclosure defense attorney.
After utilizing Method 1 (filing Bankruptcy) or Method 2 (Order to Show Cause), you will buy yourself enough time to seek certain retention options with your bank. For example, you can engage in a Loan Modification process to see if the bank will modify the terms of your mortgage to make it more affordable for you. You can also engage in a Short Sale if you choose not to retain your home. It is best to engage an experienced foreclosure defense attorney to represent you in the aforementioned legal processes. You should try to seek help as soon as possible so that you can thoroughly explore all of the options which may be available to you.
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