If you have debt piling up and your home is at risk, you need to know how to stop the foreclosure process in Texas. As long as a foreclosure sale has not been completed, it’s likely you can stop foreclosure once it’s started, giving you a chance to keep your home. If you decide not to keep your home, the extra time can still be used to go over your options and minimize the financial impact of foreclosure.
What is Foreclosure?
Foreclosure is the legal process in which a lender repossesses mortgaged property, typically a house or condo, from a home loan borrower when that borrower fails to make their payments. Similar to car repossession in Texas, foreclosure happens when your property is sold to pay a debt owed to another party.
In Texas, homeowners need to know how to stop foreclosure most often when it is due to falling behind on mortgage payments. You may also need to stop a foreclosure in Texas due to money owed on a home improvement loan or home equity line of credit, for back taxes, or even to pay money owed to a homeowners association.
Whatever the reason, the most important thing for you if you suspect you may be facing foreclosure is to find out how to keep your home.
What Happens in Texas Foreclosures?
In Texas, foreclosure sales are held the first Tuesday of the month, even if it falls on a holiday. A representative of the creditor, often an auctioneer, will sell the property to the highest bidder. This results in one of several outcomes:
- A bid is for the amount owed or more than you owe – If the bid is for more than you owe on the home, then they become the owner of the property and owe no further money to the creditor.
- All bidders bid less than what is owed – In this case, the auctioneer enters a bid on behalf of creditor for a credit against the money you owe. This can be for the full amount you owe, which would leave you owing nothing to the creditor, however, you have still lost your property.
- All bidders and the creditor bid less than what you owe – You’ve lost your house, received only partial credit against the outstanding balance, and you may, if it is a mortgage foreclosure, still be sued for the remainder of the balance.
Foreclosure Vs. Eviction in Texas
In order to know how to stop foreclosure in Texas, it’s important to understand how it is related to and different from eviction. Eviction is the process of removing renters from a property owned by someone else. This is governed by Texas Tenants rights.
On the other hand, foreclosure is the process of removing real property from your possession, selling it to someone else (or the creditor.) Then, if you are still residing in the property, you are subject to eviction by the new owners.
You can avoid this by:
- Opening Your Mail
- Getting A Lawyer Involved Early
- Deciding If You Want To Keep Your Home
- Declaring Bankruptcy To Stop Foreclosure
Stopping Foreclosure On Your Property
Time is important if you’re facing foreclosure. Once a foreclosure sale is done, it is almost impossible to redeem or regain your property by paying off the creditor or highest bidder. Here’s how to stop a foreclosure in Texas to keep your home.
Read All of Your Mail from Creditors and Tax Offices
It’s easier to prevent foreclosure from happening than it is to stop it once it’s started. That is why you need to open and read every piece of mail from your mortgage company, creditor, or county tax office. This will not only give you important information about your account but also may offer some debt solutions that will head off the possibility of foreclosure, like a payment or forbearance plan.
Even if they are past the point of willingness to help you themselves, any notice of intent to accelerate a loan (calling the entire note due in full) or notice of a pending foreclosure sale will come in the mail. The acceleration notice must come at least 20 days prior to calling the entire note due.
Talk To A Lawyer About How To Stop Your Foreclosure
Speaking with experienced debt and bankruptcy attorneys early gives you the best chance to keep your home. They’ll answer your questions about how long a foreclosure takes in texas, how to stop a foreclosure, and what your options are to get your financial life back on track. They’ll help you understand your rights under the law, and can help you pursue bankruptcy if it’s the best option.
While money is often tight in situations where foreclosure is a possibility, don’t let a lack of funds prevent you from seeking legal help. Your foreclosure attorney should offer you a free consultation, where they’ll review your case and talk to you about possible steps moving forward. This no-obligation meeting can provide clarity and peace of mind on its own while giving you the information you need to take the first step toward getting out from under your mounting debt.
Decide If You Want To Keep Your Home
While your initial emotional reaction may be a definitive yes. On reflection, you may decide it’s best to let your property go, but that doesn’t mean you have to accept foreclosure. If you can find a buyer willing to take on the property, you may be able to get your mortgage company to accept them.
Ideally, this would satisfy your debt to them, however, this can still result in a net loss or short-sale for you. If no buyer is to be found or the mortgage company refuses their offer, then you will need to explore other options to stop the foreclosure.
Declare Bankruptcy To Stop Foreclosure
Declaring bankruptcy in Texas is one option you have when deciding how to stop foreclosure proceedings. As soon as the petition is filed in court, an automatic stay is put in place that prevents a foreclosure from proceeding. This stay gives you time to fully examine your financial options and decide the best path to take.
With a Chapter 13 bankruptcy, your foreclosure lawyer will work on restructuring your debt into a payment plan that will be for a set time period, often 3-5 years. Once you’ve reached the end of the plan, your payments are caught up and you continue with your property and life without the specter of foreclosure looming over you.
If you have multiple liens securing the debt on your home, this can be a great choice as all but the first property lien can be stripped, or converted to unsecured debt, with successful completion of your payment plan. This can potentially save you thousands of dollars as unsecured debt is only paid based on your ability to pay during a Chapter 13 bankruptcy.
You may also consider a Chapter 7 bankruptcy, which discharges most debts. This is especially useful if you’ve decided to give up your home but want to avoid having the remaining balance and a potential suit following you around for years.
Talk To A Texas Debt Lawyer to Stop Foreclosure
We can help you stop foreclosure even once it has started, but you have to make the first call. With over 15 years of experience helping Texans stop foreclosure and keep their homes, we’re ready to work with you on saving your property.
Call our offices in Dallas or Fort Worth a free consultation today and one of our foreclosure attorneys will review your case and walk you through your best options.