How Chapter 13 bankruptcy helps. Chapter 13 bankruptcy lets you pay off the “arrearage” (late, unpaid payments) over the length of a repayment plan you propose—usually lasting three to five years. But you’ll need enough income to at least meet your current mortgage payment at the same time you’re paying off the arrearage. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home.
In a Chapter 7 bankruptcy, you still may be able to keep your home. However, in most cases you must be current on your monthly home mortgage payment. If you do choose to keep your home in a Chapter 7 bankruptcy you must deal directly with the mortgage lender and in most cases reaffirm the mortgage note if you intend to keep the home. In a Chapter 7 bankruptcy, your attorney has less control in a foreclosure proceeding once the case is filed. If you are behind on your mortgage payment, or foresee becoming behind on a mortgage payment, a Chapter 13 bankruptcy would probably be best for you.
Learn more about bankruptcy and foreclosure by contacting the Cook Law Firm today.
Mortgage paperwork mess: Next housing shock?
(CBS News) If there was a question about whether we’re headed for a second housing shock, that was settled last week with news that home prices have fallen a sixth consecutive month. Values are nearly back to levels of the Great Recession. One thing weighing on the economy is the huge number of foreclosed houses.