There are only three ways to stop a mortgage foreclosure in Georgia:
- the lender or its attorney can voluntarily stop the foreclosure process
- you can file a lawsuit in Superior Court and ask the judge to enjoin (stop) the foreclosure action
- you can file Chapter 13 bankruptcy and use the power of Chapter 13 to cancel the default and pay back your arrearage (missed payments) in a five year Chapter 13 plan
Stopping a Pending Georgia Mortgage Foreclosure Using Chapter 13.
Mortgages (called a Deed to Secure Debt, or Security Deed in Georgia) can be foreclosed in one of two ways in Georgia: by judicial foreclosure, i.e., filing a lawsuit or as is more often the case, pursuant to a Power of Sale provision in the Security Deed. Almost all foreclosures in Georgia are done under Power of Sale, because the lender does not have to go to court to foreclose on the property; it has only to publish a notice in a legal paper for four consecutive weeks prior to the foreclosure sale. This means that once the foreclosure process starts, you will lose your house in just over a month of you do not take action. Once the lender has initiated publication, it is unlikely to voluntarily stop the foreclosure process, since it would have to begin the publication cycle all over again. That being the case, the only way to stop a foreclosure sale is by filing a Chapter 13 bankruptcy.
Under Georgia law (and depending on the terms of your mortgage), 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.
Chapter 13 usually turns out to be the least expensive and most certain method to stop a sale on the courthouse steps. Firstly, Chapter 13 represents federal law that creates an automatic and time tested bar to foreclosure. With limited exception (mostly having to do with prior filings), the instant you file Chapter 13, the automatic stay of bankruptcy comes into force and all creditor actions are rendered null and void.
Chapter 13 works even if you file it one minute before your house is sold in the courthouse steps and the lender’s attorney does not know that you have filed. In fact, sales consummated in violation of the automatic stay (whether the violation is intentional or not) are void and even an innocent third party purchaser of your property will be out of luck.
Obviously you do not want to wait until the hour before, the day before or even the week before foreclosure to pursue the Chapter 13 option. The most effective Chapter 13 bankruptcy filings are those where we have sufficient time to carefully review your debts and assets, income and expenses. The minute you learn that your lender has actually started foreclosure proceedings or has referred your file to a lawyer to start the process, call my office to evaluate both bankruptcy and non-bankruptcy options.
You May Lose Your House to Foreclosure in Georgia in as Little as 30 Days After Foreclosure Notice is First Published.
As explained above, Georgia law provides allows non-judicial foreclosures, which means that your mortgage lender and its foreclosure lawyer do not have to go before a state court judge to take title to your house through a foreclosure. Instead, they need only advertise a notice of the pending foreclosure sale of your property for four consecutive weeks in a newspaper published in the county where the foreclosure sale is to be made, and in the case of personal residences, provide notice to the owner at least thirty (30) days prior to the sale.
The 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 within a few weeks of the date on the foreclosure notice. Therefore, if you receive a foreclosure notice, you have less than 30 days to take action if you want to save your home.
Once your account has been referred to a foreclosure law firm, therefore, Chapter 13 bankruptcy remains your most realistic option for saving your home. 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 auctioneer 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 Ginsberg Law Offices 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 have an emergency and a pending foreclosure within the next few days, our firm is uniquely qualified to represent you in this emergency situation.