Unwanted Texas Foreclosures Prevented by Filing for Bankruptcy

During the past nine months, the housing market has continued to exhibit its volatility across the country, leading to both large rises and falls in the number of foreclosure filings initiated each month. In May 2012, the U.S. saw a rise in the number of foreclosure filings. This increased action came in the wake of many banks and mortgage providers delaying foreclosure proceedings in response to heightened criticism regarding a failure to properly verify documents before initiating the proceedings. Since May 2012, the number of foreclosure filings has continued to ebb and flow, with September 2012 seeing a marked decrease in certain areas.

Texas has not been immune to these sharp fluctuations. In June 2012, for instance, Texas was one of five states that accounted for approximately 50 percent of all foreclosures in the U.S.

Foreclosures in Texas

In some states, foreclosures can only be completed through the judicial process. In Texas, they can be done either through a judicial proceeding or non-judicially. The ability to foreclosure on a property outside of the courtroom means Texas foreclosures generally progress quickly. According to RealtyTrac, "the entire foreclosure process can take about three months," in Texas.

The process to foreclose on a property in Texas is relatively simple. When a borrower defaults, the mortgage provider must provide notice to the homeowner, allowing at least 20 days to pay the defaulted amount. If the homeowner does not pay, the mortgage servicer may then initiate the foreclosure process. The lender must inform the borrower that he or she now owes the entire balance of the loan and that a sale will be held.

While the borrower may then bid on his or her property at the sale, the property will go to the highest bidder. Since Texas laws result in a simple and fast-paced foreclosure process, it is critical for those facing financial difficulties to consider all of their options to avoid losing their homes.

Alternatives to a Texas Foreclosure

After filing for bankruptcy, creditors can no longer take action against the debtor without first getting permission from a federal judge. Most importantly, mortgage lenders are prevented from foreclosing on a person's home. This provision of the Code is referred to as the automatic stay and protects people who are attempting to regain their financial footing.

In most cases, filing for Chapter 13 bankruptcy provides the most benefits for people at risk of losing their homes. Chapter 13 bankruptcy provides time for people to get control of their finances, during which they are able to remain in their homes. Typically, people are able to maintain control of their homes after filing Chapter 13 bankruptcy.

If you are facing difficult financial circumstances and think you may be on the path to losing your home, make sure you have considered all of your options. A skilled Dallas bankruptcy attorney will be able to assess your case and advise you on the best possible course of action to regain your financial footing and protect your home.