Hello, this is Jeff Kelly. And in this podcast, I would like to address a lot of fears that people have about losing their home during this Coronavirus pandemic. Let me just say this, I don’t believe there’s going to be a flood of foreclosures that are going to be caused by this. and I would like to explain why. Number one, the mortgage industry is not super interested in killing the United States real estate market, which is what would happen if every single person who missed a payment in April got foreclosed on. So from talking to clients and from talking to other bankruptcy attorneys, it’s my understanding, then in most cases, the mortgage companies are willing to defer up to about four months of payments. Now the problem and challenges at the end of those four months, they want their money back they want all those payments made. So I’m guessing that when we get to that point, after the pandemic is hopefully over or subsided, or maybe the quarantine will be modified to get most people back to work.
I believe that the mortgage industry is going to be doing a lot of loan modifications. Again, they there don’t want to kill the entire United States real estate industry, which they would do if they foreclosed on everyone. So I think there’s going to be a lot of loan modifications. But for those people who can’t get a loan modification, the people who are truly in a pickle, Chapter 13 might be a good option for catching up those urges.
So, I would like to talk about two different hypothetical here, hypothetical situations here, one where chapter 10 would be a good option and then to give you another illustration of where it would not be a good option.
So let’s start with a good one first. Let’s say you have somebody they’ve been out of work because of Corona. Six months goes by mortgage company is not bending the foreclosure process has started, and this person files chapter 13 because now they’re back at work. Now the key is they’re back at work, and so we can take the six month arrearages and we can spread it out, over, you know, up to a five year period.
Now, contrast that with a different situation. Let’s say somebody’s six months behind on work, and nobody in the household is working, there’s no source of income. Chapter 13 is not going to work to help save that house. You’ve got to have income in order to be able to pay back those arrears to save it. Now, when is it too late? When is the house gone? And the answer is if in Georgia after is illegally foreclosed.
So, I want to talk a little bit about the foreclosure process and how that works. In most cases, a mortgage company is going to send you a certified letter about six weeks before the foreclosure takes place. Under Georgia law, they have to advertise your house for four consecutive weeks before the foreclosure date. Foreclosures in Georgia typically take place on the first Tuesday of every month. So what that means is, for example, Today is April the 20th 2020. So what that means is, if they wanted to start the foreclosure process against you immediately, they’ve already missed advertising for the month of April. So foreclosure in May is out. So what would have to happen is they would advertise your house for the entire month of May, and then foreclose the first Tuesday of June.
If you’ve got any questions about your situation is chapter 13 a good option? Give us a Call at 770-881-8449. It’s a free consultation. It is a no brainer. It is smart to and it’s just the obvious smart choice to explore all of your options. If you get a chance, check out my website, www.kellycanhelp.com. We’ve got a lot of blog posts there. And also I’ve written a book on chapter 13 and chapter 7. And you can get a free copy, just go to my website, scroll down to the bottom, type in your email address and boom, we’ll get that delivered to you in your inbox.
Thank you so much for tuning in.