Using Chapter 13 When You Are Facing Foreclosure

Keeping Your Home and Restructuring Mortgage Debt

Using Chapter 13 When You Are Facing ForeclosureIf you’ve fallen behind in your house payment, to the extent that you’ve either been threatened with foreclosure, or are involved in foreclosure proceedings, a petition under Chapter 13 of the bankruptcy laws can help you get your mortgage back on track and keep your home. Initially, you’ll have the benefit of the automatic stay, which prohibits your mortgage lender from writing, calling or taking any legal action (other than through the bankruptcy court) to collect house payments. While you have the relief from collection efforts by your lender, you’ll want to work to negotiate new payment arrangements.

How Chapter 13 Helps You Restructure Your House Payments and Keep Your Home

When you file for protection under Chapter 13, you and your attorney will work with all your creditors, including your mortgage lender, to put together a comprehensive “reorganization” plan, which will set forth the agreements for paying off your creditors over a three-to-five-year period. You won’t likely be able to work out a plan that allows you to pay off your mortgage over that period, but you can negotiate a payment that is affordable. Ideally, when the Chapter 13 period is over, you will have paid off other, smaller, debts in full, making it easier to meet your mortgage payment obligations.

The plan that you put together must be submitted to and approved by all your creditors. In addition, it must be approved by the bankruptcy court. Accordingly, you don’t have to worry that your mortgage lender will demand an unreasonable payment. The bankruptcy court will carefully review the proposed plan to ensure that it’s in your best interests.

Contact Heath, TX Bankruptcy Attorney Carrie Weir

At the Law Office of Carrie L. Weir, I provide a free initial consultation to anyone with questions or concerns regarding a personal bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 to schedule a private consultation. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.

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