In the current economic climate, it is not surprising that many homeowners have fallen behind on their mortgage payments. Whether their financial woes were caused by loss of income or increased expenses or a combination of the two, as a bankruptcy practitioner for over 40 years and a former Chapter 13 Trustee, I have seen and heard it all.
For homeowners with regular income who are behind on their mortgage, Chapter 13 bankruptcy could be a viable option to save their home from foreclosure.
How Chapter 13 works:
The second that a Chapter 13 bankruptcy is filed, something called the automatic stay goes into effect, which stops all creditors from taking any collection action against you. This means that mortgage companies may not go forward with the foreclosure process.
Included in the papers filed with the Bankruptcy Court is something called a Chapter 13 Plan. The Chapter 13 Plan details how the debtor proposes to pay back their debts. For homeowners that are attempting to save their home from foreclosure, their Plan would provide for the repayment of all delinquent mortgage payments over a period of 3 to 5 years. The mortgage company is forced to accept these payments.
So for example, lets say a homeowner has a monthly mortgage payment of $1,000/month, and that he is 4 months behind on his mortgage. In a Chapter 13 Plan, the homeowner would propose to pay the $4,000 delinquency by making monthly payments over a period of 3 to 5 years.
Don’t wait until the last minute! If you have received a notice of intent to foreclose, if you are receiving harassing phone calls from your mortgage company, if you have been served with foreclosure papers, contact a bankruptcy attorney immediately to find out what options you have. David Kasen has over 40 years experience as a bankruptcy practitioner. He has saved thousands of homes from foreclosure. Call Kasen & Kasen now to schedule a FREE INITIAL CONSULTATION (856) 424-4144.