Filing for Chapter 13 Bankruptcy Protection to Deal with Mortgage and Property Tax Debts


For most people facing financial challenges, it’s the mortgage and property tax obligations that are hardest to pay, and typically in arrears. While you generally cannot discharge those types of payments in a Chapter 7 proceeding, you can use Chapter 13 to get some relief. Here’s how it works.

With a Chapter 13 bankruptcy filing, you’ll have the opportunity to negotiate new payment terms with your creditors. You’ll have to submit a “reorganization” plan to the bankruptcy court, which must be approved by your creditors. If the plan is accepted, you’ll typically have three to five years to satisfy y our creditors. That may not be enough time to repay your entire mortgage—instead, you may be able to pay off all penalties and arrearages and even secure new, more affordable terms.

One of the key benefits to filing a Chapter 13 bankruptcy petition is that you’ll get the immediate benefit of the automatic stay. The automatic stay prohibits creditors, including mortgage lenders, to contact you directly, in any way, in an effort to collect a debt. All communications with you must be through the bankruptcy court. In addition, while the automatic stay is in effect and you are working out your plan, you may be able to defer some payments, so that you can build up a cushion.

As with your mortgage, your property tax arrearages generally cannot be extinguished through a Chapter 7 bankruptcy. However, you can renegotiate your property tax debts in a Chapter 13.

Contact Heath, TX Bankruptcy Attorney Carrie Weir

I provide a free initial consultation to anyone with questions or concerns regarding a bankruptcy filing. Contact my office by e-mail [Link to Contact Page] or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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