A new law has been put in place in Minnesota that can help homeowners going through foreclosure. This law gives homeowners the ability to contest the foreclosure if it is found that the lender may not have used the proper procedures in the process. This forces the lenders to take a closer look at their policies, which can give the homeowners the protections that they need at a very difficult time in their lives.
While the law will help some homeowners, it doesn’t address the reason why they fell behind on the mortgage to begin with. The financial difficulties that led to foreclosure may still exist. There are options available that may help homeowners remain in their homes and regain control over their financial situation. In other words, the new lay may basically buy time rather than save the home from foreclosure in the long-term.
The one option that homeowners may choose to go with is Chapter 13 bankruptcy. Many homeowners throughout the Twin Cities who have faced potential foreclosure have chosen this option because they can reorganize their debts into a more manageable payment. The payments last for three to five years. Once the payment plan is completed, the dischargeable debts are deemed paid in full. This allows the homeowner to keep their mortgage current and to potentially keep their home if they make the payments on time.
Another advantage to Chapter 13 bankruptcy is that filing puts an automatic stay into effect. This stay prevents any collections from occurring while the bankruptcy is in progress. This is helpful for those experiencing financial problems so they can get back on their feet. They are placed in a situation where they are able to avoid the same situation in the future.
The new law will mostly help those who have fallen victim to poor practices by the lender. Unless there has been a change in circumstance that allows them to continue with their mortgage payments without any trouble, Chapter 13 bankruptcy may be the best alternative to staying in the home and resolving the delinquent mortgage.