Bankruptcy as Foreclosure Defense Using Adversarial Actions
In the ongoing struggle to save homes from foreclosure, homeowners often find themselves backed into a corner, feeling as if they’re facing an unstoppable force. The clock is ticking, the auction date is looming, and desperation sets in. But, what many don’t realize is that there are powerful tools available to fight back, even in the eleventh hour. One such tool that can shift the balance of power is the adversarial action in bankruptcy court.
What is an Adversarial Action?
An adversarial action is not just another step in the bankruptcy process; it’s a full-blown lawsuit within your bankruptcy case. When you file for bankruptcy, you’re not simply waving the white flag. Bankruptcy initiates an automatic stay, effectively halting the foreclosure process in its tracks. This buys you time – time you can use to challenge the claims being made by your lender. And with an adversarial action, you’re taking that challenge directly into the courtroom, forcing the party attempting to foreclose to prove they even have the right to do so.
Why is This Critical?
Understanding the shaky foundation many foreclosure claims rest upon is key. The party trying to foreclose often lacks the proper legal standing. Whether through sloppy paperwork, questionable mortgage assignments, or sheer negligence, lenders frequently fail to maintain the proper documentation or authority to foreclose. The mortgage may have changed hands multiple times, sold to different entities, or bundled into securities. In many cases, the party claiming to own your loan isn’t even the rightful holder of the note. By filing an adversarial action, you compel the lender to prove their case in front of a judge, a move that can stop a foreclosure dead in its tracks.
Bankruptcy: Not Just About Wiping Out Debt
Filing for bankruptcy isn’t just about erasing your debts. It’s about creating a legal shield around your assets—especially your home. The moment you file, the court issues an automatic stay, halting all foreclosure activities. This stay gives you the breathing room you need to mount a solid defense. During this pause, you can gather evidence, prepare your adversarial action, and go on the offensive, forcing the lender to justify their actions.
Steps to Use an Adversarial Action in Foreclosure Defense
- Challenge the Lender’s Standing: First and foremost, the lender must have the legal right to foreclose. In many cases, the mortgage has been passed from hand to hand so many times that the current holder may not even have the documentation to back up their claim. Through an adversarial action, you force them to produce the original paperwork and prove they have standing.
- Demand Proof of Ownership: It’s not uncommon for lenders to be unable to prove they own your loan. If they can’t provide clear, legal evidence that they are the rightful owner, they cannot foreclose. Missing or faulty documentation is the Achilles’ heel of many foreclosure cases, and an adversarial action exposes these flaws.
- Unveil Securitization Failures: Most mortgages today are packaged and sold as securities to investors. This process, known as securitization, is rife with broken chains of title, missing paperwork, and other clerical errors. Your adversarial action can shine a spotlight on these issues, making it difficult—if not impossible—for the lender to prove their case.
- Examine the Assignment of Mortgage: A proper, legal transfer of your mortgage is essential. If there’s a break in the chain of assignments or if the current lender can’t prove how they obtained the mortgage, they lack the authority to foreclose. These assignments, often sloppy or outright fraudulent, are fertile ground for challenging a foreclosure. All our Case Analysis work here at Livinglies.me includes a deep dive and report on this complete with an expert affidavit that all constitutes evidence that can be used in Court.
- Expose Robo-Signing: In their rush to foreclose on as many homes as possible, many lenders resorted to robo-signing—an illegal practice where employees sign off on thousands of foreclosure documents without reviewing them. This practice can often be uncovered in an adversarial action, dealing a heavy blow to the lender’s case.
The Power of Evidence
In an adversarial action, evidence is your greatest weapon. Our services here at Livinglies can document evidence related to your mortgage: the original note, the mortgage itself, and every assignment. These documents, or the lack thereof, often tell a very different story than what the lender would have you believe. Additionally, expert witnesses may be necessary to help unravel the complex web of securitization and mortgage assignments. By building a strong evidentiary case, you can force the lender to answer tough questions—questions they may not have good answers for. Our experts here at Livinglies are qualified to testify at trial if needed and their expert affidavit’s are evidence ready.
Conclusion: Taking Control of Your Defense
Adversarial actions in bankruptcy are powerful tools that shift the burden of proof back onto the lender. Instead of passively waiting for foreclosure, you’re forcing the lender to prove they have the right to take your home. By challenging their standing, exposing flawed securitization practices, and demanding proper documentation, you can create serious hurdles for the foreclosure process.
Too often, homeowners lose their homes because they didn’t know the rights and tools available to them. But foreclosure is not a foregone conclusion. With the right strategy and the courage to fight back, you can turn the tide and protect your most valuable asset—your home.
Need help in assessing your case? Does your attorney need our help? Use our services to help guide you through the process early enough to avoid mistakes that can cost you your home in an illegal foreclosure action. Call our office today at 844.478.6774 to inquire if we can help. You can also submit a case statement here and get a complimentary recommendation as to your best course of action.
