Question: We're facing a foreclosure on our house in Cumming. We want to keep the house but the bank won't work with us. We've asked for a loan modification but the bank said no. We've asked for other modifications and they were denied. The bank won't reduce our mortgage and the monthly payment is just too high for us. We are behind by 4 months. They are threatening foreclosure.
I never thought I'd be in this position. My wife and I both work and we have good jobs. I'm a chiropractor and she's a nurse. But our work hours have been cut and we have doctor bills that we have to pay first. We owe a lot of money to hospitals and physicians. So there has not been enough money left over every month to pay the full mortgage bill.
We have made partial mortgage payments. But the bank is not accepting them. I had a job lined up to work in a shale oil field but I just found out that the company is cutting back and they don't need me now that the price of oil has plummeted. I was going to travel to another state to work during the week and come back on weekends to see my wife and our 2 kids. We live in Forsyth County about 5 minutes from downtown Cumming.
Does a bank have to accept a partial mortgage payment? They really should because it's better than nothing. Can I stop the foreclosure temporarily so we can rent a house that we can afford in the kids' school district?
E.O. in Cumming
Answer: Banks and finance companies are not obligated to accept partial mortgage payments. Many times partial mortgage payments are rejected and foreclosure proceedings move forward.
A bankruptcy filing will, however, stop a foreclosure. If you want to keep the house, then a chapter 13 allows you to put the mortgage arrears into the bankruptcy and pay them off, usually over 60 months. But you need to make your mortgage payments moving forward if you want to retain your home.
If your goal is simply to delay a foreclosure so that you have time to rent a house, a chapter 7 would temporarily block a foreclosure (and eliminate your debts). A chapter 7 could delay the foreclosure from 1 month to 6 months or longer, depending on many factors including the aggressiveness of the bank. But, ultimately, if you file a chapter 7 and don't bring the mortgage current, the bank will foreclose.
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