Defend Foreclosure Lawsuits Before Considering Bankruptcy

Many people file Chapter 13 bankruptcy to stop a foreclosure, and some people file Chapter 7 bankruptcy to discharge mortgage deficiency liability. I think many people are filing bankruptcy prematurely, and unnecessarily, to deal with foreclosure.

I think most homeowners should strongly defend foreclosure lawsuits before they consider bankruptcy; bankruptcy should be the last resort. I have seen some experienced mortgage defense attorneys succeed in stopping foreclosures through their effective defense of mortgage foreclosure lawsuit. In the past week, I’ve seen attorneys who have actually won mortgage foreclosure lawsuits by defeating the bank at the final foreclosure trial. Not only have these attorneys stopped the foreclosure in its tracks, but they have established claims against the bank for their attorney fees incurred in defending the foreclosure. The mortgage bank ends up without a foreclosure and with liability to pay the homeowner fees.

The homeowner victories I’ve heard of are based upon evidentiary challenges to the bank’s proof of their foreclosure actions. Valid evidentiary objections, such as hearsay, have prevailed against ill-prepared and inexperienced bank attorneys.

I do not handle mortgage defense litigation. When people call to ask me whether bankruptcy will help solve their mortgage foreclosure situation I usually now refer them to effective mortgage defense attorneys to fight the bank’s foreclosure and advise them to consider bankruptcy only if their defense fails in state court.

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