Most of us been in a position where we have been living paycheck to paycheck and have to pick and choose whether to pay certain bills or put food on the table for our families. Families should not have to go through this, but up until the point they come into my office, that is often the case. Now, sometimes one of the bills that doesn’t get paid is the mortgage. If you live in a home and the mortgage is secured by land, the home would go through the normal foreclosure process. But what happens if you live in a mobile home and the mortgage is not secured by land, and instead you rent the lot? The process is a little different.
I haven’t been able to pay the mortgage on my mobile home in Little Falls, what can happen?
First, the lender will notify you of the default and the amount you are past due (called “arrearages”). You would then have 30 days to bring your mortgage current. There may be other conditions within your loan documents that would need to be met as well to cure the default, but the biggest one and the one that probably creates the most stress for folks is the amount past due. If you aren’t able to bring your account current, the lender can then initiate a court action against you to take repossession of your home. It’s a quicker process than a foreclosure, which is why it is a good idea to contact Kain & Scott as soon as you receive a notice of default. We can help you work through the financial issues and create a plan that allows you to keep your home.
If the lender does repossess the home, the lender is able to then sell the home. Similar to a vehicle repossession or a home foreclosure, if the lender does not sell the mobile home for what you owe, you are responsible for the difference (called a “deficiency”). The lender could get a judgment against you for the deficiency and initiate collection processes against you. This could result in wage or bank account garnishments. If you are here in the process and have already lost your home, you can still call Kain & Scott to alleviate the financial stress that the repossession or foreclosure deficiency is causing.
What if I haven’t been able to pay lot rent?
Let’s say you have been able to keep up on your mortgage payments for your mobile home, but your mobile home is located on a lot that you pay rent on. You haven’t been able to pay your lost rent for a few months and you are now worried about what the park can do, despite the fact you have made your mortgage payments.
There are a few things with mobile home parks that should be noted. First, the park has to give you at least 10 days’ notice before taking action. After providing notice, the park may then initiate eviction proceedings. A court date will be scheduled and you would appear. At the hearing, you would either settle the matter or the Court can order the eviction. If the court orders an eviction, the two options would be to either remove your home (within 7 days) or to move out and leave the home (for up to 60 days) to allow for an in-park sale.
An interesting nuance to this procedure: if you are evicted, you are permitted up to 2 redemptions per year. What this means is that you can pay the amounts owed and remain on the property. This is not always a viable option and that is why Kain & Scott is here to help.
Repossession or Eviction processes for my mobile home have started, what do I do?
The first thing you should do if you receive a notice of repossession or eviction is breathe. Why? Because all is not lost! You have options and Kain & Scott can guide you through the process to save your home and stay in the park. How? A Chapter 13 bankruptcy. Even if you have already been to court and the lender or the park obtained a court order, we can help. Whether you are behind on mortgage payments, lot rent, or both, there is relief out there and it starts with a call to Kain & Scott.
How can bankruptcy stop mobile home park eviction or repossession?
I’m glad you asked! With a Chapter 13 bankruptcy, we take the amount you are in arrears (whether it is mortgage only, lot rent only, or a combination of the two), your unsecured debt (such as credit cards, personal loans, payday loans, etc), and wrap it up into a payment plan you can afford. That payment is paid monthly to a bankruptcy trustee for a period of 3 to 5 years. The amount of time you are in a Chapter 13 payment plan depends first upon your household income. If you are below what is called the “median income” for Minnesota, you have flexibility on the timeframe, though the minimum will be 3 years, but you have the ability to have a longer period, up to 5 years. If you are over the median income, you will be in a 5-year plan. During this time, you continue to make your normal mortgage and lot rent payments, and the additional payment plan amount for the arrearages. At the successful completion of the payment plan, you are caught up on your mortgage, you keep your home, and the remainder of the unsecured debt that you still owe is discharged.
This, of course, is a simplified explanation of what happens during the process. If you fallen behind in your mortgage and/or lot rent payments, reach out to Kain & Scott today for a free consultation by either calling 800-551-3292 or by going online and speaking with one of our fantastic representatives at www.kainscott.com. You should not have to worry about where you will be living, especially around the holidays. Let Kain & Scott help take the stress of debt off your shoulders.
