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Nevada Assembly Considering Foreclosure Protection in the Event of a Government Shutdown

Posted by Rory Vohwinkel | Apr 26, 2019 | 0 Comments

In early 2019, the longest government shutdown in United States history put tremendous pressure on federal workers in Nevada. Many federal workers were on the verge of foreclosure after missing two consecutive paychecks during the shutdown. Nationwide, more than 800,000 federal workers were affected during the 35-day shutdown.

Now, the Nevada Legislature is taking steps to alleviate that financial pressure and protect Nevada federal workers from foreclosure should the government shut down again. Legislation filed in the Nevada Assembly would put foreclosure proceedings and evictions on hold for some state and federal workers should the government shut down again. The legislation protects both full-time employees as well as contractors. In total, there were around 3,000 federal workers that were affected by the shutdown. Primarily affected were TSA agents at work in Nevada airports.

If passed, the legislation would pause foreclosure until 90 days after a shutdown is over. The foreclosure pause would cover both employees and members of their household. The bill would also allow federal workers and their families to stay in their rented units for at least 30 days after the shutdown ends. In these cases, the landlord would be barred from proceeding with an eviction.

The protections for federal workers in the case of a government shutdown also extends to automobiles. Lenders would be barred from repossessing a car from a federal worker from the beginning of a shutdown until 30 days after the shutdown ends. The bill also includes penalties for anyone in violation of foreclosing or repossessing when they are barred from doing so during a shutdown.

Foreclosure Protection in Nevada

The purpose of the proposed legislation could be a life-saver for many federal employees and their families. But for the majority Nevadans, this bill wouldn't provide them with any relief in the face of a potential foreclosure. Thankfully, there are multiple options for protection from foreclosure in Nevada.

The most obvious option is filing a Chapter 7 or Chapter 13 bankruptcy. One of the notable benefits of bankruptcy is the automatic stay. The automatic stay immediately halts all attempts by your creditors to collect against you the moment your bankruptcy petition is filed. The stay halts any attempt at foreclosure, which will give you time to get your mortgage back on track.

Another option is foreclosure mediation. Offered by bankruptcy courts since 2015, foreclosure mediation allows you to stop foreclosure attempts while you enter into mediation with your lender. If mediation is successful, you and your lender may come to an agreement on how you can stay in your home.

Mediation isn't the only way to work with your lender. It is also possible to negotiate a loan modification with them outside of the mediation process. A loan modification can take many different forms, including changes to your interest rate or even forgiveness of some of your arrears.

If keeping your home isn't an option, it is also possible to avoid foreclosure through a short sale. A short sale involves the sale of your home despite the mortgage debt being more than the value of the home. With a short sale, it is possible that after the sale your lender may waive any remaining debt.

There are many options for stopping a potential foreclosure. To learn what makes the most sense for you, contact Vohwinkel Law today.

About the Author

Rory Vohwinkel

Rory Vohwinkel began his legal career at one of Nevada's oldest and largest law firms, representing clients in commercial litigation and business transactions. Rory went on to serve as the sole in-house attorney for a national real estate investment and property management company. In 2009, Rory...

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