The End of Foreclosure Mediation

Delaware County homeowners are going to be greatly impacted by the discontinuance of the Delaware County Common Pleas Court’s Foreclosure Mediation Program.  Effective January 1, 2013, the program will no longer be offered for new foreclosure cases.  Mediation will still be offered for cases filed on or before December 31, 2012.  And cases already referred to mediation will continue until the mediation has concluded.

For nearly four years the Delaware County Common Pleas Court has offered a Foreclosure Mediation Program.  The program was started in response to the Supreme Court of Ohio’s “Save the Dream” initiative.  The goal was to give homeowners an opportunity to try and work things out with the lender.

Under the program homeowners were provided with a packet they could easily fill out to request mediation.  They did not need an attorney to complete the packet.  The Court freely granted requests for mediation.  And there was little to no cost to the homeowner.

Like most imposed mediation programs the success is going to vary.  Homeowner’s still needed to be in a financial position to make payments.  Lenders needed to be willing to try.  And both parties needed to compromise.

With the end of the Foreclosure Mediation Program the foreclosure process will move much faster.  Homeowners will need to act quickly if they wish to remain in their homes.  They will no longer be able to file a quick motion and gain an extra 30 to 60 days in their home.  They will also lose opportunities to investigate modification options that typically came out of the mediation process.  The end of foreclosure mediation in Delaware County will have a big impact on homeowners.

Will I Lose My House if I File Bankruptcy?

This is a common concern for many people who are contemplating whether or not they should file bankruptcy.  The vast majority of people who own a home have one or two and sometimes three mortgages secured by their home.  Because of these mortgages, there is generally little equity or value beyond the amount owed on the mortgage(s).

Chapter 13 bankruptcy is available to most people who have a steady stream of income.  One of the goals of Chapter 13 is to allow people to keep their property while they pay some money back on the debts they owe.  So no you will not lose your house if you  file Ch 13 as long as you have sufficient income to meet your basic living expenses and can still afford to make the mortgage payments.

If Chapter 7 bankruptcy is the option you prefer, you will generally not lose your house as long as you are current on the payments, and your income is enough to allow you to continue making the mortgage payments and cover your basic living expenses.  In Ohio you also have exemptions of approximately $20,000.00 (single) and $40.000.00 (married) that allow you to claim as exempt against any equity you have in your residence.  So unless your house is will sell for an amount far exceeding the amount you owe on it, and you can continue to make the mortgage payments, you should not lose you house if you file Ch 7 bankruptcy.

But what about the Trustee, can’t he/she take my house anyway?  The trustee works for your creditors.  The Chapter 7 trustee’s job is to find assets he/she can turn into cash to pay to your creditors.  In order for the trustee to benefit from taking your house he has to be able to sell it for a profit after he pays the mortgage(s), taxes, and you for your exemption amount.  Typically you will not lose your house because the trustee will not profit from selling your house.

Please contact me at 740-369-6812 to discuss your situation and answer any further questions.