Do-It-Yourself Foreclosure Help Increasing But It’s Still Good to Talk to a Bankruptcy Lawyer

07 Feb Do-It-Yourself Foreclosure Help Increasing But It’s Still Good to Talk to a Bankruptcy Lawyer

A recent New York Times article, Foreclosed Homeowners Go to Court on Their Own, begins:

ALBUQUERQUE — Saving your home from foreclosure is increasingly a do-it-yourself project.

The article features an hour-long workshop started in my state of New Mexico by the nonprofit Fair Lending Center, a legal aid group.

I applaud the workshops, and have for many years worked to help self-represented individuals (also called “pro se parties”) do better getting through the judicial system. But it’s very hard for people to represent themselves in a court proceeding– even lawyers are advised not to represent themselves (we lawyers have a saying– the lawyer who represents herself has a fool for a client). Emotions are likely to interfere in being able to think and act clearly enough. But more than that, with rare exceptions, no single one-hour workshop will give a self-represented individual enough “learning” to “win” a lawsuit. Judicial proceedings include strict rules and requirements the self-represented party will not know and likely cannot have the time or energy to master. The attorney teaching the workshop acknowledges this — she is quoted as saying, “[a]t the end of the day, unless you have major defenses, it’s likely the court will make a finding of foreclosure.”

Thus, the bad news is that with rare exception the attendees of the classes will not learn enough to help them directly win their cases. The good news is that once they show up at the courthouse — which they seem more likely to do having taken the classes — they might get some additional help from the court, giving them more of a chance of an outcome that is either less bad, or even possibly good. Still, the odds of “winning” are not good.

New Mexico is generally a “judicial foreclosure” state meaning creditors must go to court and get a judge to sign an order permitting the foreclosure process (in some states creditors do not have to go to court). The large number of filed foreclosure cases threatens to overwhelm the judicial system in many parts of the country, including New Mexico, and some courts are implementing programs to try to help self-represented debtors better understand the requirements of the system. Some are discussed in the article. But the programs cannot do much to “help” any one side in a lawsuit. People in court, especially people threatened with the loss of their home or an investment in a home need more advice specific for them and their specific situations.

New Mexico’s 1st Judicial District Court has a mandatory foreclosure mediation program. If a self-represented debtor shows up (does not “default” by simply failing to file any papers or show up at the times ordered by the court), she can use that program to try to work something out with the creditor. Often it simply won’t work anyway — participating in a mediation does not require reaching a shared solution to a problem.

It is, however, another chance to try to work something out.

So long as you have the time, money and energy to try and want to, it might well be worth it. If you are going to try, try to do it as best you can — get more advice, from the start, and throughout, as you can. At the same time that you explore debt settlement, the same time you explore your options when you face insolvency, the same time you face the hard reality that your financial options are disappearing, when your personal finance situation has become overwhelming,talk to a bankruptcy attorney. Just as a creditor has a right to file a foreclosure lawsuit, a debtor has a right to file a bankruptcy. Legal information and advice specific to you and your situation might be what helps you get further in representing yourself in any action by a creditor against you. It might be what helps you conclude earlier that your time, money and energy are better put in a different option than you are pursuing.

Talk to a bankruptcy attorney, not just a foreclosure attorney, or a debt settlement company, when you are researching your options when faced with insolvency.

Other Bankruptcy Law Network posts of interest when considering this issue include File Bankruptcy – Keep Your Home/Walk Away From Your Home by Susanne Robicsek, North Carolina Bankruptcy Attorney, and taxes relating to foreclosure, by Cathy Moran, California Bankruptcy Lawyer .

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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