If you are facing the frightening proposition of foreclosure and are searching for options to save your home, Chapter 13 bankruptcy may be right for you. Filing for bankruptcy is a serious undertaking that should not be taken lightly, but with the right consideration and professional assistance, it could help you save your home and get your finances back on track. To discuss Chapter 13 bankruptcy further and determine if it is right for you, contact a Chapter 13 bankruptcy lawyer today.
How Can Chapter 13 Bankruptcy Help Save My Home?
Chapter 13 bankruptcy can be a lifeline for homeowners struggling to keep up with mortgage payments. By restructuring your debt into a manageable repayment plan, you can catch up on overdue mortgage payments over three to five years. This plan helps you keep your home while giving you time to stabilize your finances.
Will I Lose My Home If I File For Chapter 13 Bankruptcy?
Filing for Chapter 13 bankruptcy does not mean you will lose your home. In fact, it provides legal protection from foreclosure. Once you file, an automatic stay goes into effect, stopping foreclosure proceedings and giving you the opportunity to catch up on missed payments as part of your repayment plan. Attorneys like our colleagues at Resolve Law Group can attest to the effectiveness of Chapter 13 in safeguarding your home.
What Are The Requirements To Qualify For Chapter 13 Bankruptcy?
To qualify for Chapter 13 bankruptcy, you must have a regular income that allows you to meet the repayment plan’s requirements. This plan should cover your priority debts, such as mortgage arrears, and still leave enough for your living expenses. Additionally, your secured and unsecured debts must not exceed certain limits. In your consultation with a bankruptcy lawyer, they will help you evaluate your financial situation and determine if you are eligible for Chapter 13.
Can Chapter 13 Bankruptcy Eliminate My Second Mortgage?
Yes, in some cases, Chapter 13 bankruptcy can eliminate a second mortgage through a process known as lien stripping. If your home’s value is less than the amount owed on your first mortgage, the court can reclassify your second mortgage as unsecured debt. This means it will be paid off at a reduced rate through your repayment plan, and any remaining balance may be discharged at the end of your plan.
How Does A Repayment Plan Work In Chapter 13 Bankruptcy?
In a Chapter 13 bankruptcy, your debts are consolidated into a single repayment plan based on your income, expenses, and the amount of debt. Over three to five years, you make monthly payments to a bankruptcy trustee, who then distributes the funds to your creditors. This plan prioritizes securing debts, like mortgage arrears, to help you keep your home. This plan will be created in tandem with an experienced bankruptcy lawyer and approved by your creditors to ensure that all necessary provisions are covered and the best possible solution for all parties is reached.
Contact A Lawyer Today
Chapter 13 bankruptcy can be a powerful tool for homeowners facing financial difficulties. By offering a structured repayment plan and protecting against foreclosure, it provides a path to financial recovery while allowing you to keep your home. Consulting with a bankruptcy lawyer ensures you understand the unique implications and benefits of Chapter 13, allowing you to make an informed decision and receive valuable legal assistance throughout the entire process.
