Foreclosure can be a terrifying inevitability for individuals who are struggling to make mortgage payments. In these situations, forbearance may be an option for reducing your mortgage payments temporarily. However, forbearance may not be enough. What happens when these measures fall through? Filing for bankruptcy could be a viable option to keep your home.

Foreclosure in Ohio

It is important to understand that foreclosure is judicial in Ohio, meaning the court handles foreclosing on your property. The process begins when the lender files a complaint with the court. The court will then serve you a copy of the complaint, along with a summons for your hearing and a date by which you are required to respond. If you require more time to prepare a reply, you can file a motion asking for an extension. Check with the court clerk about requesting an extension.

If you fail to answer the summons, the court rules a default judgment. This means that you automatically lose the case. The bank will then be able to take the assets that they requested which could include your house, car, or other belongings. As long as you answer the suit, the bank cannot receive a default judgment from the court.

What Is Forbearance?

Forbearance is helpful when you need to pause or reduce your mortgage payments temporarily. A forbearance period does not incur late fees and does not eliminate the amount you owe. You must pay any missed costs after the forbearance period is over. You should monitor your statements for potential errors that could further complicate your situation. Contact your servicer to determine the best course of action for your current financial issues. If you require an extension or a loan modification, your servicer should be able to help. Consulting a qualified attorney can also help to solidify your case and move forward.

Forbearance has been a viable option for many homeowners during the COVID-19 pandemic. With the unemployment rate reaching 14.7% in 2020, many homeowners have found themselves out of work and unable to pay their mortgages. The CARES Act has been a source of some relief for many of these struggling homeowners. This bill has helped to offer forbearance to homeowners who, due to COVID-19, are unable to pay their federally backed mortgages. The CARES Act is effective for up to 180 days of initial forbearance. If necessary, homeowners have the option to extend their coverage. However, a word of caution: While the CARES Act has offered temporary relief for many families, the temporary relief can come at a high cost. After the forbearance period ends, the accrued arrearage does not automatically go to the end of the mortgage term. You must apply and be approved for a loan modification that would move the accrued arrearage to the end of the mortgage term. The mortgage company or bank may require that you pay the accrued arrearage in lump sum or spread it out over several months. Regardless, the accrued arrearage does not dissappear and another step must be taken in order to deal with it.


When forbearance fails to alleviate the burden of mortgage debt, bankruptcy may be a viable option. There are different types of bankruptcy that an individual may claim. You must take stock of your specific situation and research the best option for you.

The first type of bankruptcy is Chapter 7. Also known as liquidation bankruptcy, Chapter 7 is an efficient way to erase debt by liquidating assets. This type of bankruptcy allows you to keep exempt property while the trustee sells your remaining assets to pay off your debt.

Chapter 13 bankruptcy is known as a wage earner’s plan. This gives you the ability to freeze a foreclosure and catch up on payments by forming a repayment plan over a determined period of time. Typically, Chapter 13 bankruptcy is best suited to individuals with regular income who cannot pay off their debts with their earnings.

Can Bankruptcy Help When Forbearance Fails?

Bankruptcy can help stop creditor actions like foreclosure. However, it would be best if you explored alternative options that would not result in property loss. Homeowners have several options in addition to bankruptcy. Check to see if you can further extend your forbearance period. The CARES Act allows homeowners the option of extending their relief by an additional 180 days. You must contact your servicer to request an extension. If your loan is not covered by the CARES Act, you can speak with your servicer or an approved housing councilor.

If this is not an option for you, you may be eligible to refinance. Refinancing can require high fees, but depending on the length of your loan, you may consider speaking to a fiduciary to begin the refinancing process. Another option made available to homeowners is a loan modification. Many lenders have started to offer a variety of programs to assist homeowners during the pandemic. Homeowners at risk of defaulting can ask for a loan modification that can help reduce payments. Loan modifications can affect credit scores, but they are a safer option for financial relief than a foreclosure.

Ultimately, the best option for your financial situation will be unique to you. There are many options to choose from, and bankruptcy can be an excellent option for some homeowners. However, every relief effort from lenders comes with a price, so homeowners should take careful stock of their finances and loans to determine how much they are willing to pay for temporary relief.

Determining if Bankruptcy Is Right for You

The best way to evaluate if bankruptcy is the right option for you is to consult a qualified attorney. Attorneys like Arthur J. Southard have the knowledge you need to determine the best option for you. He understands how deeply personal and emotional it can be to face foreclosure and the financial loss of bankruptcy. As such, he approaches each case with personalized care to help you fight for your goals.

Call the Southard Law Firm, L.L.C. today at or visit us online to schedule a consultation.