Many times I have clients that need to file bankruptcy, but are behind on their mortgage and cannot afford to get caught up, even through a chapter 13. The mortgage company is threatening to foreclose, and they ask me when they have to move out.

The answer I give them is, “When they are ready to throw you out!” In other words, after they bring the foreclosure, get a judgment, and hold a sheriff sale. At that point, you no longer own your home and have to leave.

But What If the Bank Doesn't Foreclose?

But what if the mortgage company does not serve you with foreclosure papers? What if you are waiting years for this to happen? The answer is: hang tight, you might get a free house out of it!

How can this be? How can you keep your house without having to pay the mortgage? Simple! It’s called the Statute of Limitations, and in New Jersey it is 6 years. What has been happening lately is that mortgage companies have been waiting too long to foreclose and doing so after the 6 years have passed!

At that point, the bank could be barred from foreclosing if you oppose it and raise that defense. But eventually you will have to pay. The lien is still in place, and if you try to sell it (or you die and your estate sells it), it will pop up. So the mortgage company will eventually get their money, but in the meantime, you can skip the payments and live there for free (just pay the real estate taxes and the insurance). 

So What Do You Do?

So what does this mean to you? It means that if you are in default on your mortgage, have been for some time, and have received a foreclosure complaint, you should consult with a lawyer to see if you have a statute of limitations defense. You might be able to live in your home for free until you decide to sell!

If you live in the southern New Jersey area, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.

Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.