CAN REFINANCING STOP A FORECLOSURE IN NEW JERSEY? TRAVIS J. RICHARDS SOUTH NEW JERSEY BANKRUPTCY ATTORNEY

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1 CAN REFINANCING STOP A FORECLOSURE IN NEW JERSEY? TRAVIS J. RICHARDS SOUTH NEW JERSEY BANKRUPTCY ATTORNEY

2 Facing a foreclosure is an extremely emotional situation. Worrying about where your family will live can cause overwhelming anxiety. Most people have done everything they can think of to save their home short of filing a bankruptcy. While filing a bankruptcy to stop foreclosure may be an option, some individuals may choose to take a non-bankruptcy route to save their home from foreclosure. For those individuals, refinancing may be an option to save their home from foreclosure. Who is a Good Candidate for Refinancing to Stop a Foreclosure? Unfortunately, not every homeowner is able to refinance to stop a foreclosure. A good candidate for refinancing would be someone who:

3 Do you have a steady income? If you are facing a foreclosure because of a temporary loss of income or a temporary decrease in income and you can now afford to resume your mortgage payments, refinancing may be a valid option to stop a foreclosure. If you are unable to pay a mortgage payment on your current income and you do not anticipate that to change in the near future, refinancing is probably not going to work for you. Can you qualify for a new mortgage? Of course, the key to stopping a foreclosure by refinancing is the ability to qualify for a new mortgage. If you have been struggling with debts in addition to your mortgage payment, your credit rating may be too low to qualify for a new mortgage. If your can qualify for a new mortgage, you must pay close attention to the interest rate and the mortgage terms. If the interest rate and the mortgage terms will result in a higher than average monthly payment, you may not be able to afford the new mortgage with your other monthly financial obligations. Is your home worth saving with a new mortgage? Another consideration is the value of your home in relation to the new mortgage amount. In order to stop a foreclosure, you will need to refinance the payoff of your original

4 mortgage. The payoff amount will include late fees, attorney s fees and other costs associated to the foreclosure action. These costs will increase the mortgage payoff significantly. Before you decide to refinance to stop a foreclosure, you should consider the equity that will remain in your home after the refinance. If the refinance will result in no equity while extending your payment period for another 30 years, refinancing to save the home may not be the best financial decision for you. Using Bankruptcy to Stop a Foreclosure If you are not a good candidate for refinancing to stop a foreclosure, you may want to consider a Chapter 13 bankruptcy filing. Through a Chapter 13 bankruptcy, you can stop the foreclosure and save your home without refinancing your current mortgage. If you qualify for a Chapter 13 bankruptcy, you can repay the past due mortgage payments, including the costs associated with the foreclosure, through your bankruptcy plan over a thirty-six to sixty month plan. You will resume your current monthly mortgage payments outside of the bankruptcy plan.

5 The Chapter 13 plan allows you to repay the past due mortgage payments without interest and without the cost of refinancing. It does not extend the term of your mortgage nor does it take away any additional equity in your home. In most cases, filing a bankruptcy to stop a foreclosure allows you to keep your home at a much lower cost than refinancing while also resolving any other debt problems that you may have in addition to your pending foreclosure. Filing a Chapter 7 bankruptcy case will also stop a foreclosure; however, it is only a temporary reprieve. Once the Chapter 7 case is closed or the mortgage company receives relief from the automatic stay, the foreclosure action will proceed. Some debtors may be able to use this time to find a way to refinance

6 the mortgage to save the home; however, if this is impossible, the additional time may give the debtor a chance to find another place to live and to move without the threat of a foreclosure sale. Finding a Solution That is Right for You Because every person s financial situation is different, it is difficult to determine if refinancing is the best financial choice for you or if a Chapter 13 bankruptcy would be a better solution to the foreclosure and your other financial problems. Consulting with an experienced bankruptcy attorney will give you the opportunity to explore several financial options to determine the best remedy for your financial problems. Even if you are convinced that a refinance is your best option to stop a foreclosure, it is always a wise idea to explore all of your options before making a final decision.

7 Contact an Experienced Mount Holly Bankruptcy Attorney Personal Approach, Professional Service, Affordable Payment Plans The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey. If you are experiencing financial problems due to debt, contact our office at to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.

8 About the Author Travis J. Richards Travis Richards is not your typical attorney. He understands the random curve balls life throws at honest, hard-working people. Growing up on farm in Southampton, New Jersey, money didn t always come easy for many of his family, friends and neighbors. He saw that bad things often happen to good people. This background shaped his approach to the practice of law. Mr. Richards considers it a privilege to help clients from all walks of life recover from financial hardship. In doing so, he aims to provide every client with the same service he would provide a member of his own family. His mission is to get to know each client individually and provide the best legal advice possible for them to regain control of their lives. Over the past decade I have impacted the lives of hundreds of individuals and families in an extremely positive way, he says. Through bankruptcy I am able to show my clients a freedom that they thought impossible to achieve My goal is not only wipe out the debt they have accumulated, but also help make sure they will never be in a situation to need my services again. Mr Richards has helped hundreds of individuals eliminate debt, keep their property and return to financial stability. Bankruptcy gives deserving individuals a second chance. Mr.Richards graduated with honors from Rutgers University, in New Brunswick, NJ where he majored in History. In 1999 he graduated, again with honors, from Rutgers School of Law, Camden, NJ. He was admitted to the New Jersey and Pennsylvania Bar in 1999, where he is licensed to practice law before the United States District Courts. Mr. Richards practices bankruptcy, mortgage loan modification work, debtor rights and credit card negotiations. He maintains memberships in the National Associate of Consumer Bankruptcy Attorneys, the Burlington County Bar Association, the New Jersey State Bar, the Pennsylvania State Bar, and the American Bankruptcy Institute The Law Office of Travis J. Richards 141 High Street Mount Holly NJ Phone: Fax: Website: njbankruptcyinformation.com