Foreclosure and Bankruptcy

Whether you have experienced a job loss, a decrease in earnings, personal problems such as a divorce, or are recovering from health issues, falling behind in just one or two payments could put your home at risk for foreclosure. In these situations, it is important to act fast to lessen a number of costs and penalties you incur and to ensure that actions available to save your home fall within the established timelines. The following outlines the foreclosure process in Oklahoma, as well as how filing for bankruptcy can help.

The Foreclosure Process

Legal guidelines for foreclosure are listed under Title 46 of the Oklahoma Statutes (Okla. Stat. tit. 46, § 41 to 49). There are two types of foreclosure proceedings in our state:

  • Judicial foreclosure: This requires a lawsuit to obtain a foreclosure order. Once the order is issued, your home can be auctioned at sheriff’s sale. Afterward, the lender may sue for a deficiency judgment, which is the amount between what the house sold for and what remains owed.
  • Non-judicial foreclosure: This process may be used when there is a ‘power of sale’ clause in the mortgage or deed of trust. This pre-authorizes the lender to sell the property in the event the borrower defaults on the loan.  

Judicial foreclosure is generally the most common. Even if there is a power of sale clause, there are steps you may be able to take to avoid non-judicial proceedings. Under U.S. Housing and Urban Development guidelines (HUD), foreclosures generally follow this timeline:

  1. First or second missed payment: You will be contacted by your lender and referred to a housing counselor.  
  2. Third missed payment: You will receive a demand letter or Notice to Accelerate, informing you that you have 30 days to get caught up with your loan.
  3. Fourth missed payment: This will be near the end of your 30-day period, after which your loan will be referred to the lender’s attorney, with fees added to the amount you owe.
  4. Sheriff’s sale: This is the date of the actual foreclosure. Notice of the sale may be made publicly, such as in your local paper, and a notice may be taped to your front door.

Once a sheriff’s sale is scheduled, you may still be able to save your home by paying all past due amounts and fees, or by filing for Chapter 13 bankruptcy.

Saving Your Home Through Bankruptcy

Under U.S. Bankruptcy Court guidelines, Chapter 13 allows you to retain secured property, such as cars and homes while restructuring certain payments over a three to five year period. Once bankruptcy is filed, a ‘stay’ goes into effect, which prevents further collection or foreclosure actions until the case is resolved. Through a Chapter 13, you may be able to stop a pending sheriff’s sale, get relief from certain unsecured debts, and lower other payments and past due amounts, which can allow you the breathing room to better afford your mortgage.

We Are Here To Help

If you are having trouble making payments or are behind in your mortgage, call or contact Deborah Brooks & Associates, P.C. online right away. We can schedule you a free consultation with our bankruptcy attorney in our Oklahoma City or Lawton office to discuss the options available in your case to help you save your home and your investment. Call our office today (405) 840-6363.