Many people facing foreclosure are reluctant to file chapter 13 bankruptcy. However, chapter 13 bankruptcy is the best solution when you’re behind on mortgage payments and about to lose your home. Only in chapter 13 bankruptcy can you force your lender to accept a repayment plan while you keep your home.
Why Chapter 13 Bankruptcy Is The Best Option
As the foreclosure process continues your options become more limited. If a sale date has been set negotiation with your lender has likely run its course. To keep your home you will need to stop the sale and make some long term arrangement to repay missed mortgage payments. After all, you won’t be able to keep your home forever if you don’t pay mortgage payments. The problem is that your lender isn’t willing to modify your loan or work with you. At this point they are more interested in selling the property and getting their money than working with you over the long term. In this instance, you will need to force your lender to accept your repayment plan; you will need to file chapter 13 bankruptcy.
Stop The Sale Now
Chapter 13 bankruptcy allows you stop imminent collection actions such as foreclosure as soon your petition is filed with the court. For many homeowners with a sale date an emergency chapter 13 bankruptcy will be their best option. Usually a chapter 13 bankruptcy petition can be filed the same day you call.
Keep Your Home
Only in chapter 13 bankruptcy can you keep your home during and after bankruptcy. When you file chapter 13 bankruptcy your attorney will create a chapter 13 plan. This plan will require you to repay delinquent mortgage payments over 3 to 5 years while making your normal mortgage payments. Most importantly, during this repayment period you can stay in your home. Upon completion of this repayment plan you will no longer be in default. Your lender can’t initiate foreclosure because you will be current on your mortgage.
In short, chapter 13 bankruptcy is the best way to stop foreclosure and stay in your home. When you file chapter 13 bankruptcy Federal law will prohibit your lender from continuing the foreclosure process. Your chapter 13 plan will call for repayment of your late mortgage payments over several years, and your lender must accept this repayment plan as long as it conforms to the Bankruptcy Code. Once you have fulfilled the repayment plan you will have completed your bankruptcy, received a discharge of any remaining dischargeable debts and no longer be at risk of foreclosure.