Can I File Bankruptcy and Keep My House?
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Yes You Can Keep Your House by Filing Bankruptcy.
Are you having trouble paying your mortgage payments? Have you received notice from the mortgage company that it is beginning the foreclosure process? If so, you are not alone. Many Americans continue to struggle to keep their homes because they have not fully recovered from the recession. Other people are having difficulty paying their mortgage payments because they have suffered a financial crisis such as losing a spouse, experiencing a medical emergency, or losing their job. There is hope. If you are wondering, “Can I keep my house,” we can help you.
Filing Chapter 13 Bankruptcy to Keep My House
Being served with foreclosure papers is frightening. You have been trying your best to find a way to pay your mortgage payments while providing the basic necessities for your family. There is just not enough money at the end of the month to pay for utilities, groceries, gas, and other items that you must have to survive. You may have missed a mortgage payment or two thinking you would make it up next month; however, before you realized it, the late fees, penalties, and other fees made it impossible for you to catch up your mortgage payments. You told the mortgage company, “I want to keep my house” but no one will work with you.
If the mortgage company would only let you catch up your mortgage payments a little bit each month you could keep your home but the only thing the representative keeps telling you is that you must pay the entire past due balance, including all fees and costs, if you want to stop the foreclosure.
Filing a Chapter 13 bankruptcy case stops foreclosure. Your mortgage company cannot proceed with the foreclosure action or sell your home at a foreclosure sale once your bankruptcy case is filed. The automatic stay provisions of the Bankruptcy Code prohibits your creditors, including mortgage companies, from pursuing collection actions without court approval once the case is filed. Because all of your unsecured debts are included in your bankruptcy case, you will also get relief from other debts in addition to stopping the foreclosure. In some cases, you may be able to restructure other secured debts, such as your car payments, to lower the monthly payment amount so that you can resume making your mortgage payments.
A Chapter 13 bankruptcy plan allows the debtor to pay the past due mortgage payments to the mortgage company a little bit at a time so the debtor can keep the home. The past due mortgage payments are included in your bankruptcy plan and paid back over a 36 to 60 month period. You will not be charged interest on the past due amount which makes catching up mortgage payments easier through the bankruptcy case. In addition to your bankruptcy plan payment, you will resume making your regular mortgage payments outside of the bankruptcy case. Once your bankruptcy plan is complete, your mortgage payments are current and your dischargeable unsecured debts are gone forever.
Chapter 7 Bankruptcy and Foreclosure
Filing a Chapter 7 bankruptcy case stops foreclosure but only for a short time. Because this is a liquidation bankruptcy, you do not have a bankruptcy plan. You must catch up the mortgage payments in full in order to keep your home when filing a Chapter 7 case. In some cases, by discharging other debts, the debtor can afford to catch up the mortgage payments to keep the home. On the other hand, if the debtor cannot afford the mortgage payments, filing a Chapter 7 case will avoid a foreclosure deficiency, discharge unsecured debts, and give the debtor a clean slate to rebuild finances after bankruptcy. Filing bankruptcy will not prevent you from buying a home in the future. In fact, the bankruptcy may help you by discharging debts and allowing you to rebuild your credit while you save money for a down payment.
Contact an Experienced Bankruptcy Attorney
If you are struggling to pay your mortgage payments, contact Weston Legal, PLLC to discuss your bankruptcy options. You have options for saving your home and dealing with your debt problems. We will help you find the solution that is best for you.