With 65% of applicants having their homes foreclosed upon instead of their mortgages modified, we suggest that homeowners consider Chapter 13 bankruptcy, a court-supervised way to keep their homes.
How Chapter 13 works for homeowners who are behind in making payments
Immediately upon filing for Chapter 13, wage garnishment ceases and creditors are relegated to receiving payments through the restructuring plan.
Where an individual is on the verge of losing their homes or vehicles, filing a Chapter 13 bankruptcy can halt the process. The court will issue an automatic stay and will then restructure the debts so that mortgage and car payments become more manageable.
By lowering the interest and reducing monthly payments, Chapter 13 bankruptcy provides a way to catch up on payments.
The Power of the Federal Bankruptcy Code
Chapter 13 has the power of the Federal Bankruptcy Code behind it, and provides many advantages for people seeking debt relief.
Other types of debt consolidations don’t have any stay provisions. Without bankruptcy protection, there is no Court Order protecting you. We see reports in the news almost daily about mortgage companies and other creditors reneging on modification and debt relief offers and there is nothing the homeowner can do in response without the rule of law.
If you are behind in making your mortgage payments, but you still have income and can pay the monthly mortgage payment, a bankruptcy counseling session will help you determine whether Chapter 13 or some other strategy is in your interests. Call our offices today.