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Bankruptcy And Other Alternative NY Foreclosure Defense Methods


In this article, you will learn about:

  • The options you may pursue when faced with a foreclosure.
  • How even simple mistakes in a bank’s paperwork can cripple their ability to foreclose on your home.
  • Why an attorney is so crucial to your success in foreclosure defense.

Is Bankruptcy An Effective Foreclosure Defense?

Whether or not bankruptcy will fit your needs will depend on a variety of factors specific to your case. Generally speaking, bankruptcy is not a viable option because of discharge injunctions and other issues that do not include foreclosure as the basis for a bankruptcy claim.

However, the most important question to consider when thinking about bankruptcy as a foreclosure offense is: What started the bankruptcy process?

A bankruptcy discharge does not avoid a mortgage lien. So even if you do obtain a discharge, the foreclosure will continue after the bankruptcy case is closed. However, there are certain things you can do in bankruptcy to deal with foreclosure proceedings.

In Chapter 13 filings, you could repay the arrears over a Chapter 13 plan. If this is done, the mortgage would be reinstated, and the foreclosure would be discontinued.

You could also modify a mortgage under the U.S. Bankruptcy Court’s Chapter 13 Loss Mitigation Program. If the bankruptcy court approves the modification, then the foreclosure case could be discontinued.

In any case, a situation in which bankruptcy would serve as a viable defense against foreclosure would be rare. To determine if a bankruptcy filing could help you (or what other options are available in your situation), the best course of action is to contact a foreclosure defense attorney as soon as possible.

What Are Other Possible Methods To Avoid Foreclosure?

You may be able to avoid foreclosure by working with an attorney to come to a settlement with the bank. This is typically done through a modification.

Other defenses to foreclosure are those that call into question the legitimacy of the bank’s ability to pursue a foreclosure. By calling into question a bank’s standing, you may be able to halt the foreclosure process.

But How Is This Done?

Mortgage and note assignments are commonplace today. A bank must show that they’re the holder of the original note. Additionally, the mortgage assignment needs to be filed prior to the date of the foreclosure filing. Without these two things, the bank does not have the standing to bring a foreclosure case, and they won’t be successful.

Normally, banks complete all this correctly. However, it’s crucial to review the documents to see if they’ve made an error and, if an error has been made, to bring it to the court where the bank is trying to foreclose.

At What Point Should I Hire A Foreclosure Defense Attorney?

The best time to contact a foreclosure defense attorney is as soon as you have received the 60-day notice from the bank that they intend to foreclose.

In this way, once you receive the foreclosure summons and complaint, you can send it over to your attorney, and they can put an answer immediately.

An attorney who practices in foreclosure defense can present your case to the bank and the court in the best possible light – providing the highest likelihood of success. My office can help you prepare your modification applications in a way that is more likely to be approved. Through our vast experience in this field, we know what the banks are looking for. We will make sure that the package provided to the bank is complete and that there’s a record of what is provided so that the bank cannot deny a receipt.

Additionally, during a settlement conference, New York State courts are better able to assist homeowners when they’re represented by a competent counsel. This is because attorneys can provide the court with the information necessary to ensure that banks negotiate in good faith.

What’s more, if the foreclosure cannot be resolved through settlement, an attorney is a homeowner’s best option in litigation.

For more information Foreclosure Law in New York, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 550-5467.

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