Most people considering filing a Las Vegas bankruptcy are more keenly aware of man-made financial disasters than natural ones, but as one might expect the problem does appear from time to time.
If your house is destroyed in a natural disaster, receiving a mortgage bill can feel like an insult on top of trauma. The bank wants you to pay for house that you can’t even use? Sadly, that’s just how the world works. Houses fall apart and can be destroyed, but the structures themselves almost never appreciate in value under normal circumstances. Here’s what to do when the worst happens.
- If prevention isn’t possible the next best alternative is mitigation, i.e. insurance. The problem is that many homeowners do not buy insurance that fully covers them, especially flood insurance. Often people will live in a very long-term flood plain, such as 100-500 years, and they’ll forgo the insurance. In the age of global warming and erratic weather, this is a mistake. Also, make sure your insurance covers as many contingencies as possible. Often, insurance companies will avoid paying out for leaks caused by storm surges by claiming it’s not a “flood” as defined in the policy. Know the weather that affects your home’s area.
- Continue paying your mortgage. There’s no reason to default if you can avoid it, but contact your mortgage servicing company to explain what happened. Take detailed notes.
- After finding safety, if possible salvage any important documents, like deeds, insurance policies, tax forms etc. Ideally, store these types of documents, especially ones you’re unlikely to use often like the deed to your property, in a safe deposit box at a bank. Deposit institutions aren’t immune from natural disasters either, but your documents are a lot less likely to be destroyed.
- File a claim with your insurance carrier.
- Contact an experienced Las Vegas bankruptcy lawyer. If you have other substantial debts, lost a job, or suffered an injury, this will definitely make bankruptcy a far better option than before.
Fortunately, if the Federal Housing Authority insures your mortgage, it will enact a 90-day moratorium on a foreclosure on your property. Fannie Mae and Freddie Mac also pressure mortgage servicers to accommodate people whose houses have been destroyed in a disaster.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation by calling 702-880-5554.