Submitted by Rachel R on Tue, 11/07/2017 - 7:51am
Worried about losing your Wilmington home?
Image via Marina Khrapova on Unsplash
Not only is falling behind on your property taxes bad news, but did you know that it puts you in breach of your mortgage terms and conditions (T&C)? A mortgage contract is usually dozens of pages long with lots of legalese that’s hard to decipher, if you even bother sifting through it. Most people concentrate on the summary finance document that shows your principal, interest rate, and monthly payments. Few delve into the pages of fine print that can trip you up if you violate the T&C. Wilmington bankruptcy can help deal with delinquent property taxes and other issues that put your home at risk.
Insurance Delinquency and Foreclosure
In your T&C, there are several conditions which, if you violate them, can put your mortgage in jeopardy and allows the lender to “call in the note.” This means that they can demand payment of the balance in full and foreclose on you if you can’t come up with it. One of these conditions is if you fall behind on your homeowners’ insurance.
The lender won’t let this slide because if something happens to your home, there is no safety net. If there is a fire, flood, or other damage, you’ll be liable for the cost out of pocket. If you don’t fix it, the mortgage lender faces a loss of property value. Your lender is listed on your insurance policy and will be notified if the coverage lapses.
In the short run, the lender may purchase coverage on your behalf and tack on the amount of the premium, plus fees and other charges onto your monthly mortgage statement. However, if you can’t afford to pay your homeowners’ insurance, you probably can’t afford the more expensive policy purchased by your lender. This can trigger foreclosure.
HOA Dues, Fees, and Foreclosures
When you don’t pay your HOA fees, the first step is that the homeowners’ association will strip your privileges, so you can’t use the pool or common areas. From there, they will add on fees and fines if you continue not to pay. But the HOA has a lot more power than you can imagine. They can sue you to try and get a lien on your bank accounts and other assets, but that’s not the worst of it.
Did you know that you can lose your home over your HOA fees even if your current on your mortgage payments? Your HOA can apply to foreclose on your property over unpaid dues, fines, and fees. But just as with problems with homeowners’ insurance, you may be able to deal with your HOA issues through Wilmington bankruptcy.
Delinquent Property Taxes and Foreclosure
Did you know that not paying your property taxes can trigger foreclosure on your home even if you’ve never missed a mortgage payment? This is because if you don’t pay these taxes, the county can foreclose on your home and the mortgage lender can lose out in a big way. Some lenders require you to put your taxes into escrow all year long, but in some cases, this is not required.
When your payments don’t go into escrow, there’s no fund to pay the tax bill when it comes due. If you can’t afford it, then you can go delinquent with the county tax authority triggering a lien and foreclosure. However, just being one year late generally won’t cause the county to come after your home, but your lender might take action.
Inability to afford your property taxes, HOA fees, and homeowners’ insurance are warning signs that you cannot afford your home. By choosing Wilmington bankruptcy, you can either catch up on the past-due amounts to save your home or ditch an unaffordable property to get a fresh start. With Chapter 13 bankruptcy, you have three to five-years to catch up on delinquent debts. With Chapter 7 bankruptcy, you can surrender unaffordable assets and the associated debt and also shed unsecured debt including credit cards and medical bills.
If you’re behind on your property taxes, insurance, HOA fees, and facing the consequences up to and including foreclosure, contact the Law Offices of John T. Orcutt today. Call +1-833-627-0115 now to schedule a free Wilmington bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Read reviews from satisfied clients then contact us for your fresh financial start.
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