Chapter 13 Bankruptcy to save your home from Foreclosure

Chapter 13 bankruptcy can be an effective way to save your home from foreclosure by providing you with an opportunity to catch up on missed mortgage payments over a period of time. Here’s how Chapter 13 works to help protect your home:

1. Automatic stay: When you file for Chapter 13 bankruptcy, an automatic stay goes into effect. This immediately halts any foreclosure proceedings against your home. The stay gives you temporary relief from collection activities, including foreclosure, while you work on a repayment plan.
2. Repayment plan: In Chapter 13, you will propose a repayment plan to the court. The plan outlines how you will repay your debts, including any missed mortgage payments, over a period of three to five years. The plan takes into account your income, expenses, and the value of your assets.
3. Mortgage arrears repayment: One of the primary goals of a Chapter 13 repayment plan is to catch up on missed mortgage payments. The plan will include provisions to repay the arrears amount over the duration of the plan, allowing you to bring your mortgage payments up to date.
4. Monthly payments: As part of the repayment plan, you will make monthly payments to the bankruptcy trustee. The trustee will distribute these funds to your creditors, including your mortgage lender. The amount you pay will depend on your income, expenses, and the value of your nonexempt assets.
5. Protection from foreclosure: As long as you make your scheduled monthly payments and continue to make your ongoing mortgage payments, your home will be protected from foreclosure during the Chapter 13 bankruptcy process. The automatic stay remains in effect throughout the duration of the plan, shielding your home from foreclosure actions by your mortgage lender.
6. Completion of the plan: Once you complete your Chapter 13 repayment plan, you will have caught up on your mortgage payments and other debts included in the plan. At this point, your mortgage should be current, and you will continue making regular payments directly to your lender.

We can guide you through the specific details of your situation and help you create a repayment plan that meets your needs and the requirements of Chapter 13 bankruptcy.