I just need more time to get back on my feet, what do I do?
DISCLAIMER- WE ARE NOT ATTORNEYS, We are sharing our opinion. Now with that said…
If your Trustee Sale is two weeks or less, Stop everything you are doing and go to Naca’s Home Save section on their website and log in as a new member.
https://www.naca.com/refinance/refinanceMemberInformation.jsp
They will issue you an ID number. Immediately return to the site and go to their Home Save Section under Sale/Auction.
https://www.naca.com/refinance/refinanceUrgent.jsp?menu=refi&language=null
Work with them until you know the sale has been postponed then return here. They are going to want information from you for your lender. At this point you can use our system with theirs and provided them a pre-packaged loan modification presentation.
If you are in a situation where you have an extreme Hardship where you have very little to NO income at all but you know it is temporary. We highly recommend you File a Chapter 7 either on your own or with an attorney. If your sale date is two weeks or less, take the above steps to at lease delay for sale until you can file a bankruptcy. With NACA you have to be pro-active and call them. If you need time, this will buy you another 30 days while you are structuring a Bankruptcy.
I am specifying a Chapter 7 bankruptcy because it is the quickest to file and it Stops the Trustee Sale in its tracks. The Bankruptcy itself will take roughly 60-120 days to work through. The courts are inundated with these filings, and it takes time to process your claim. Your lender cannot legally sell your home while you are under the protection of Federal Bankruptcy Laws. The only way they can sell your property after you file is to request what is known as a “Release of Automatic Stay”.
When you file Bankruptcy, you are asking for Federal protection. All your possessions, your car, your home anything secured with a lien is assigned to a Trustee and is placed under an Automatic Stay. Meaning it stays with the Trustee under his protection until it is released. Anyone who is disputing your claim has to show up in court when you have a meeting assigned to you with the Trustee himself.
Typically creditors do not want to bother with these things, so they only will show up if the debt is substantial. Anything $10,000 or under is not really considered substantial to a financial agency. If it is $25,000 or more they may show up on an unsecured loan or credit card, but even then it is not often they do. In the filing you will be asked if you wish to re-instate any debt you have. If you are under a Chapter 7 and your ultimate goal is to restructure, DO NOT PANIC. You can file a Chapter 13 to restructure after the Chapter 7.
HOWEVER, your lender can request a Release from the Automatic Stay, and you do not want this to happen while you are going through the bankruptcy itself. That means they are challenging your right to ownership of the property and can request removal if you are not reinstating their loan. IF THIS HAPPENS, get an attorney to file a challenge to the request to keep it in the Automatic Stay. You may need to convert the Bankruptcy to a Chapter 13, which in these circumstances are known as a Chapter 20.
The last thing you want is for your bank to remove you from the Stay until you can restructure this loan potentially under a Chapter 13. If your bank is successful in removing themselves from an automatic stay while in bankruptcy they earned the right to foreclose on your property again.
Now if they do not try this while you are under Federal Bankruptcy Protection, they will have to undergo this formality once your Bankruptcy is discharged. It is a technicality, but they cannot legally proceed without the release at that time. Depending on the bank it could take 30-120 days before they even make the attempt. We had one client go a year, because her file got lost in the cracks. Not the norm, but it happens.
If your intent is to stall again, you can File a Chapter 13 at this time, but it is not entirely necessary. You will be paying an attorney to restructure. Unless you have a second lien that is under secured on the property, there really is no need.
By the time the request is made, it will take 3-5 weeks to send the papers to court to set a date for a request for be released from the automatic stay, then it will take them another 30-90 days to set a court date to foreclose again. So this entire process can take anywhere from 6 months to a year or more depending on your lender. A lot can happen in 6 months time. For around $500 to give you that time under extreme circumstances, it is worth it.
If you still need more time, when you get to 2 weeks or less until your Trustee Sale, contact NACA and have them request an extension on your foreclosure and follow the steps you first read above. This is when you can utilize our system and work with NACA to request a modification. Don’t be surprised if you have to ask them to extend 2-3 times before the bank responds to your request. Each request postpones the sale by one month.
Understand this approach is not recommended to get you out of making your house payments, it is a last resort for extreme circumstances to give you enough time to resolve them. You will be at constant risk of Foreclosure, and you will have to be proactive in requesting these extensions. We have found that when you team up with a good advocacy group, you get responses. Naca has always pulled through, even though they can not guarantee it. We have rarely had an incident they did not.
NO WE ARE NOT AFFILIATED WITH NACA. We just like them a whole lot. 
