How to Stop a Home Foreclosure In Virginia
Virginia’s Foreclosure Law
Getting a State court to stop a home foreclosure in Virginia is never easy, according to Falls Church Foreclosure Prevention Attorney and Bankruptcy Attorney, Michael Strong. This process is also expensive, when compared to a bankruptcy method also used often to stop home foreclosures in Virginia, says Mr. Strong.
Virginia is a non-judicial foreclosure state. The non-judicial process of foreclosure is used when a power of sale clause exists within a mortgage or deed of trust. A “power of sale” clause is a term included in your mortgage that allows the lender to sell the property, usually without the need to file a lawsuit and prove it has the right to sell the property to a court before conducting a foreclosure sale. To use this foreclosure process, title to the property is conveyed by a “Deed of Trust” to a Trustee, someone appointed by the bank to hold a lien on the title to the real estate. A lien is the limited right to sell the property if the loan is in default.
Foreclosure law in Virginia is skewed to favor lenders over homeowners. Normally, publication of a set of two public ads with 1) the public sale date and place, 2) terms of payment required, and3) property description is all that is required to conduct a foreclosure in Virginia. The foreclosure process also includes notice to the borrower and other junior lien holders on the property. According to Falls Church foreclosure prevention attorney, Michael Strong, the banks are under no duty to seek a court’s permission prior to advertising and conducting a public foreclosure auction in Virginia.
The requirements to complete a foreclosure include a required public advertisement in a local newspaper in the locality where the property is located, at least two times in the five weeks prior to the foreclosure date, although this ad schedule can be modified somewhat in the terms of your deed of trust. There are also restrictions on the time to start and complete the ads prior to the sale date. AlthoughVirginia law also requires a written notice of foreclosure be sent to all parties with an interest in the property, the fact that the notice was not received, or that it was not sent, is not a sufficient basis to prevent the foreclosure under Virginia’s home foreclosure statute.
Stopping Foreclosure by Injunction or “TRO”
Stopping a home foreclosure in Virginia is not easy. The Courts in Virginia do not favor using a Temporary Restraining Order (TRO) to stop an impending foreclosure sale. Normally, a court would only issue a temporary restraining order if the foreclosure process laid out in the law is not followed properly, but positive evidence of the failed procedure is hard to develop and most judges require compelling evidence before they will issue a TRO. A TRO only stops the foreclosure process temporarily, until the parties can obtain a trial date to have the court determine if the sale should be permanently enjoined, or stopped until a compliant set of advertisements are published.
If a mortgage lender is trying to foreclose on your property and you want to keep the property, you will want to file a lawsuit against both the lender and the trustee. The trustee is the person who actually handles the sale in your county’s court. You will have to serve the lender and the trustee, notifying them of the lawsuit. Hiring an foreclosure prevention attorney during this process is imperative. You want an experienced attorney to ask the lender to produce the promissory note and justify the foreclosure proceeding.
Stopping Foreclosure by Filing Bankruptcy
Another more efficient and effective way of stopping the foreclosure process is filing Chapter 13 bankruptcy. A chapter 13 bankruptcy will come with an automatic stay, meaning that the lender cannot proceed on a foreclosure sale.
If you’re considering bankruptcy you need to understand that filing chapter 13 will stop the proceedings of foreclosure and give you time to assess your finances and propose a plan of solvency. You can only file one such chapter 13 case within the past year to make the automatic stay apply to stop a foreclosure. If it is your second filing in a year, then you have to get the bankruptcy court’s approval for the second filing and apply for a non-automatic stay order before a foreclosure can be stopped. This takes extra time and expense, so make the first filing successful by planning carefully for the chapter 13 process with your bankruptcy attorney.
Filing a Chapter 13 bankruptcy will give you the following benefits:
- you will likely be allowed to keep the house or car if you stay current with a court ordered payment system and all regular post petition payments to those creditors.
- This form of bankruptcy allows you to reorganize repayments and stops creditors from calling you to demand payment.
- Although you will be required to make a complete catch up on all pre-petition arrearages in order to keep an asset after your bankruptcy case is complete, as part of the Chapter 13 plan, the court could eliminate the balance owed at the end of the Chapter 13 bankruptcy period if you either pay the full value of the asset through your plan, or seek surrender of the collateral as part of your plan if you wish to give it back to the creditor instead of continuing to make payments.
- If the court does not eliminate the balance and you cannot pay the loan off by the end of Chapter 13 bankruptcy, you will still be responsible to continue the remaining payments if you want to keep the asset.
- Creditors cannot reach your co-debtor for the duration of your bankruptcy. Co-debtors can only be contacted before and after the bankruptcy period.
For more information on how to prepare for a Chapter 13 Bankruptcy, see our Chapter 13 companion article here.
This is not a conclusive list of benefits but as you can see as a matter of policy a chapter 13 bankruptcy is designed to allow you the opportunity to reform your debt obligations and hang on to your possessions. At this point, it is highly unlikely that a lender will hear your needs and repayment abilities. If your mortgage contained an acceleration clause the entire balance of your mortgage is due not just the missed payments. You need to take the next couple of weeks seriously as it could affect your ability to keep your assets.
Contact the Strong Law Firm today as we can help you with your filing of a Chapter 13 bankruptcy. We understand that for the foreclosure process can be very confusing and emotionally draining that is why we are here to take the guesswork out of the process. We will make the lender weight and hear your side of the story. No matter where you are in the process if you have received papers regarding a foreclosure proceeding against your property, call us today so we can help you get started.