Understanding Loss Mitigation

As a New Jersey resident, there are ways to save your home from foreclosure when you’re staring down a mountain of debt. To help save your house and your sanity, a loss mitigation program may be exactly what you need to keep your home while getting out of debt and turning your financial life back in the right direction. Read on to learn more about this important program and how it can help you!

History: The Loss Mitigation Program was created in 2011 by the United States Bankruptcy Court for the District of New Jersey. Sound like a mouthful? Although it’s only been around a few years, this program has been instrumental in helping people in New Jersey protect their homes when filing for bankruptcy. It’s structured as a tool for homeowners and lenders to negotiate a solution, and avoid foreclosure on the home using mortgage loan modifications, as well as additional loss mitigation options.

How to Qualify: If you’re looking into bankruptcy loss mitigation, you must be filed for bankruptcy as an individual under Chapter 7, 11, 12 or 13. This cannot be done as a joint filing with a spouse, or under any other chapters. Additionally, the house which is in danger of foreclosure must be your actual home where you live—your primary place of residence, and you need to have all the legal rights to the property.

Timeline and Process: Loss mitigation programs aren’t just for homeowners either, they can also be very beneficial to lenders. To qualify, either party must submit a ‘Notice of Request for Loss Mitigation’ form and order of loss mitigation. If you’re the person in debt, you’ll need to also file a certification of service three days prior to your first meeting of creditors, and they’ll then have up to two weeks to file an objection. If there aren’t any, then the judge will enter an order of loss obligation, and both parties will have up to 90 days to come to an agreement that is mutually beneficial. This time period can also be extended if the parties are in agreement, often if they feel they can reach an agreement with a short extension. Their final solution must be approved by a bankruptcy judge, and that judge can be called upon at any point during the mitigation process to resolve disputes by either party.

How to Begin: If you’re interested in pursuing a loss mitigation program, are in debt and worried about losing your home, the first and most important step is to work with an experienced bankruptcy lawyer to fully understand your options and choices. The law offices of Michael Alan Siddons have over 10 years of experience dealing with bankruptcy cases, and will treat each client with respect and professional care. You can request a free consultation today at (610) 255-7500 to get yourself started on the loss mitigation process. Don’t hesitate to make the best choice for your financial future, call today to begin this important journey.

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