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Law Off of D.L. Drain P.A., Arizona Bankruptcy Lawyer | "Helping You Get Your Life Back on Track"
Law Off of D.L. Drain P.A., Arizona Bankruptcy Lawyer | "Helping You Get Your Life Back on Track"

Diane L. Drain | Arizona Bankruptcy Lawyer

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AZ Foreclosure Overview

Arizona Judicial Foreclosure

AZ Foreclosure OverviewSite Producer2022-08-30T08:37:34-07:00

Overview of Judicial Foreclosure

judicial foreclosureWhat is a Judicial Foreclosure?

According to Investopedia, a foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of the mortgaged property and selling it. Typically, default is triggered when a borrower misses a specific number of monthly payments, but it can also happen when the borrower fails to meet other terms in the mortgage document.

KEY TAKEAWAYS

  • Foreclosure is a legal process that allows lenders to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.
  • State law in the area where the real estate is located governs the foreclosure procedure. While some lenders may cooperate with borrowers, it is never a good idea to rely on their assurances. Make sure that you have written records of all communications. Send a confirmation of the details of the chat if it is a phone conversation. Include the time, date, person you spoke with, and details of what was said. Maintain a regular record and copies of all correspondence.
  • The judicial foreclosure often takes six to twelve months to complete, sometimes even longer.

Homeowners: Never let a trustee’s sale, short sale, deed in lieu of foreclosure, or foreclosure proceed without first seeking legal and tax guidance.

Major errors made during the process cannot be corrected after it is over. As a result, disregard any advise given by a realtor, your neighbor, or a less-than-qualified attorney. Because this is your life and your future, you should always make educated decisions. I’ve seen hundreds of people deal with devastating outcomes that might have been prevented if they had just obtained professional legal and/or tax counsel.  I’m not saying this to scare you. Instead, I’m saying it because I’ve watched people suffer with terrible consequences.

Beware of real estate scams

Numerous thousands of homeowners are the victims of frauds. Many prey on a particular community, such as the low-income or minorities, since they are unable to or afraid to seek legal advice. The best advice anyone can give is to never reply to someone who reaches you during a crisis and tries to “help,” as this is never a good idea. Always make contact with reputable businesses that have a history of offering top-notch services.

Here is just one example of such greed – “foreclosure rescue scheme and scams.“.

LINKS TO OVERVIEWS, LAWS, & MORE

What choices does a lender have in the event that the mortgage is not paid?

A foreclosure or trustee’s sale is usually recorded by the lender. A procedure, such as a trustee sale or foreclosure, is governed by the laws of the state where your Arizona trustee salesreal property is located. Arizona permits a lender to choose either course of action. You should see a local lawyer who is experienced in this field of law because all states do not have the same laws. Because each person’s situation is different and the legal and tax advice you will receive will vary greatly, do not rely on the internet for correct information.

What is a Judicial foreclosure, and how does it work?

A court-filed legal action known as a judicial foreclosure (this is a court process). The real estate’s owner is served with the notice and given the chance to respond. In the end, the court will issue a judgment, typically in the lender’s favor. The law in the state where the property is located determines what occurs next. The next step in Arizona is a Sheriff’s sale.

What is a trustee’s sale, and how does it work?

A trustee is hired by a lender to collect the money they’ve invested in the property by selling it at a public auction.

If other people bid at the auction, the lender is compensated. If no one bids on the property, the lender becomes the new owner.

What happens once a trustee’s sale or foreclosure is finished? Most likely there will be an eviction.

After a lender completes the trustee’s sale or foreclosure There will be a new owner of the property.  Most likely, the new owner will want the previous owner or tenant to vacate the real estate, therefore they will file a forcible entry and detainer action (again, under Arizona law), also known as a FED.

The tenant/occupant is served with a written notice to vacate the premises. The length of the notice to vacate is determined by the type of occupancy, type of lease – commercial or residential, and whether the property is occupied by a renter or a foreclosed owner. Unless the contract specifies otherwise, this period is usually 5 or 7 days. If the tenant/occupant refuses to leave after the 5-7 days have passed, a complaint for forceful detainer action might be initiated. A notice of hearing will be delivered to the property’s occupant.  In the end, the new owner will get an eviction order requiring the resident (often the previous owner or tenant) to vacate by a certain time.  If the tenant, or old owner, does not leave then the sheriff will forcibly evict the occupant.

If the property is residential (ARS 33-1377) or non-residential (ARS 33-361), the laws regulating forcible entry and detainer actions are different (ARS 33-361).

What happened to any money that was left over after my house was sold at a trustee’s sale or during a foreclosure?

The money in question is known as “excess sale proceeds“. The application process for the funding is set by law.  NEVER give up the opportunity to pursue out those monies.  Instead, consult an expert lawyer instead so that you are aware of your rights.

house precariously sitting on jinga blocks

Our homes are typically both our most expensive investment and treasured property.

In Arizona, I oversaw thousands of trustee sales when I worked as a creditor’s attorney many years ago. I quit that business because I wanted to help individuals keep their houses and stop them from being lost.

hand holding clay house, bound with chain

As your circumstances change, you might need to learn about your options for dealing with a home that is suddenly a burden.

The rights and obligations of the landowner and the landowner’s creditors are typically defined by the laws of the state where the land is located (except federal lands). The laws that set the rules of the land differ in each state. As soon as your financial situation becomes troubling, see a knowledgeable attorney who specializes in bankruptcy and foreclosure to learn about your choices. You could be pleasantly surprised by your options.

I AM HERE FOR YOU – FREE ADVICE
Bankruptcy in Arizona and My Philosophy represented with helping hands bridge

Am I Eligible to File Bankruptcy in Arizona?

Chapter 7 Qualifications

The means test is the major qualification for Chapter 7 debtors. If your annual household income is less than the national average, you may be eligible for this type of bankruptcy. This figure is updated every few months.

If you do not qualify for Chapter 7, other options, such as Chapter 13 bankruptcy are usually available.

More on Chapter 7…..

Chapter 13 Qualifications

In Chapter 13 cases have limits on the amount and type of debts. There is also a minimum income and expense requirement. Debtors in Chapter 13 must have enough disposable income to make a monthly plan payment.

More on Chapter 13….

Helpful Insight

The right to file Bankruptcy bankruptcy is Protected by the United States Constitutional.

As early as 1789, Congress was authorized by the US Constitution’s Art. 1, Section 8, Clause 4 to enact bankruptcy laws to assist all citizens in obtaining a fresh start. The first bankruptcy law was enacted in 1800. Clearly, this option has been viewed as an important tool for protecting our citizens. As a result, you should never feel obligated to apologize to me or anyone else for exercising your constitutional rights.

Arizona Bankruptcy Law

When you file for bankruptcy, an automatic stay is triggered, which immediately stops things like:

  • Repossession
  • Wage garnishment
  • Foreclosure
  • Lien placement
  • Creditor harassment

The protected repayment period in a Chapter 13 and immediate debt discharge in a Chapter 7 are two other features of bankruptcy law. If you file for Chapter 13, you will have three to five years to catch up on mortgage payments and other delinquent secured debts. If your income is above the median income you will most likely have a five year plan (there are exceptions).  Most credit card, medical bill, and other unsecured debt is eliminated in a few months under Chapter 7.  But any non-exempt property can be seized and sold to pay your creditors.  The result is different in a Chapter 13.

Confused

Confused? Of course! That is why it is very important to have an experienced Arizona bankruptcy attorney on your side and helping you with the options.

Bankruptcy in Arizona is a complex interaction of multiple laws that should not be attempted without competent legal counsel.

Do not hire inexperienced attorneys who are unfamiliar with bankruptcy law. I say this not to scare you, but because I’ve seen good people make bad and costly decisions without realizing it.

What are the terms “Pre-Petition Assets” and “Pre-Petition Debts”?  What are Assets and Debts after filing the bankruptcy in Arizona?

Pre-petition assets are assets that you owned prior to filing for bankruptcy. Some of these assets may be used to settle pre-petition debts, or payments owed prior to filing for bankruptcy. In a chapter 7, any assets you obtain after filing for bankruptcy in Arizona are usually considered post-petition assets, and most of your pre-petition creditors cannot seize them. Similarly, any liabilities you incur after filing for bankruptcy, referred to as post-petition liabilities, are not discharged in a bankruptcy proceeding. But note that this may differ slightly in a chapter 13 case.

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