Do we have to talk with our lender during the foreclosure process? 7 Answers as of April 20, 2011

We have received a mortgage foreclosure summons, but we are not interested in fighting for the house. We're wondering what happens if we don't talk to our lender during the foreclosure process and what happens if we do not go to court. Also is it true that we can file a form that will get us out of the taxes next year (because of the "addition to income")? Should we send our lender a letter letting them know that we are not abandoning the home during the process? And finally, is bankruptcy the best way to go?

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Law Office of Neal L. Weinstein
Law Office of Neal L. Weinstein | Neal L. Weinstein
You ask a number of questions which require review of a huge number of factors to give you the best answer. First, you do not need to talk to the lender or answer the complaint. If you want to stay in your home for the longest period of time, you should file an answer within the 20 day period, of if it has expired, as soon as possible, and answer the Complaint denying all material allegations. This will prevent a default judgment and require the lender to file a motion for summary judgment or take you to court for trial. Once a judgment is eventually obtained against you, as presumably you will not continue to pay the mortgage payments, you still have a 90 day redemption period, at least in Maine.

This whole process could take 9 months or a year to complete. As for your taxes, you probably will obtain some tax advantages, but without knowing your entire financial picture, I could not advise you on that, except to tell you to contact a CPA in your area, and I don't mean H & R Block, but a real CPA who could review your financial picture, acquisition cost of your house, capital improvements, tax bracket, etc. Although certainly more expensive than H&R, you get what you pay for. Finally, bankruptcy, like your tax situation requires a review of all or your financial issues, including, medical bills, credit card bills, existing credit situation, future needs, etc., so a qualified bankruptcy attorney should be consulted on this complex issue. I hope this helps.
Answer Applies to: Maine
Replied: 4/20/2011
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
No, you do not have to talk to your lender during the foreclosure process. I encourage you to consult with a tax advisor and a bankruptcy lawyer to obtain information as to whether to file bankruptcy and any tax consequences of the decisions you may make as it relates to your real property.
Answer Applies to: California
Replied: 4/19/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
Sounds like you should consult a bankruptcy attorney in your area for guidance.
Answer Applies to: Indiana
Replied: 4/19/2011
Ferguson & Ferguson
Ferguson & Ferguson | Randy W. Ferguson
Most bankruptcy attorneys give free interviews. You should sit down and talk to an attorney before you do anything. You never have to talk to the company, but I do not see a reason why you would not want to at some point. There is no way to know if bankruptcy is the best way to go without more information.
Answer Applies to: Alabama
Replied: 4/19/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
I'm not sure what state you are in and I am only licensed in California. Consult with a bankruptcy attorney in your area. He or she will know what the process is for a foreclosure in your state. It is true about the the taxes as long as your house is worth less than 2 million dollars.
Answer Applies to: California
Replied: 4/19/2011
    The Law Offices of Benjamin C. Tiller, Esq.
    The Law Offices of Benjamin C. Tiller, Esq. | Benjamin Tiller
    The short answer is no, there is no requirement that you speak with your lender. Many of the answers to your questions depend on where you and your home are located. Not going to court will result in a default judgment for foreclosure. Then, depending on the state, there will be a notice period and a sale. All states allow for some time to get you and your family out of the house after the foreclosure sale. A knowledgeable attorney in your state will be able to help you more. Feel free to contact me if you are in Montana!
    Answer Applies to: Montana
    Replied: 4/19/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    No you don't have to talk to your lender. Assuming this is your residence, there is no tax on debt's that are forgiven on foreclosure of your residence, for the duration of the housing crisis. In some state the mortgage company can some after you for what they don't get at the foreclosure sale and in some states they can't. That has a lot to do with whether you should file bankruptcy and you really need to talk to a bankruptcy lawyer in your state.
    Answer Applies to: Virginia
    Replied: 4/19/2011
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