Well, this one caught our attention. Most mortgage services will move much quicker on a foreclosure than they did with this couple. On the other hand, this couple had a few unique circumstances that helped them remain in their home without making a payment for 12 years. Essentially, the couple moved to refinance their loan in 2009 but never made a payment. In the shuffle of paperwork and numerous loan modifications, they got lost. Then, in 2015, they filed for Chapter 13 bankruptcy. In 2017, they filed for Chapter 7 bankruptcy. They filed lawsuits against their mortgage lender, alleging negligence, unfair business practices, and violations of California state law. Then, in 2020, the pandemic struck, and evictions and foreclosures were held off until the state of emergency was lifted. Finally, in 2022, their house was foreclosed.

Can You Game the System to Keep Your Home?

With an innovative approach, you may be able to keep your home for more than a decade without paying a dime. However, you will never find a lawyer willing to support you in your endeavor since it would likely be considered fraud against the bankruptcy system. 

Essentially, there are bankruptcy services in California that do not help you file for bankruptcy so much as they prevent creditors from taking your stuff. They will help you file the paperwork for bankruptcy only to get an automatic stay. When the automatic stay runs out, they just file another bankruptcy and keep the ball in play. Obviously, the court eventually catches on. The process also costs money. Maybe not as much as a mortgage payment, but you are still spending money to file the bankruptcy, the lawsuits, and whatever else. So, abuse of the automatic stay can result in delaying a creditor’s adverse actions against you. However, you will eventually run out of time with this method. The only reason the creditor did not catch up with the couple mentioned above earlier is that they were inundated with loan modification requests, and of course, there was a global pandemic. 

Would the couple have been able to get away with their scheme in Indiana? California allows mortgage lenders to file foreclosure documents without a judge signing off on the matter. Indiana makes it more difficult for mortgage lenders to file foreclosure documents than California. It is possible that because of the extra work, it would have been easier to pull this off in Indiana than California.

On the one hand, the couple mentioned above was able to live mortgage-free in their family home for 13 years while the matter was sorted out by the courts; on the other hand, they could have been kicked out at any point. So, they had to deal with the stress of their impending eviction for 13 years, and they eventually lost their home anyway. The only reason you would want to do this is that you believe you are in a life-and-death battle with the mortgage lender and must win at all costs. Instead of spending the money on your mortgage, you are paying for legal filings, bankruptcy filings, and lawsuits, if not with money, then with time.

Talk to an Indiana Bankruptcy Attorney Today

Home in foreclosure? Chris Arrington can help. Call today to schedule a free consultation, and we will strategize on how you can keep your home.