Can a Chapter 13 bankruptcy lawyer stop a foreclosure on my house

Chapter 13 is an option that may help save your home from foreclosure. Your chapter 13 bankruptcy trustee will work with you to develop a repayment plan which will be tailored around your monthly budget. This type of bankruptcy allows an individual to develop a repayment plan with creditors, including mortgage companies instead of liquidating any assets. If your home is scheduled to be sold at foreclosure, a Chapter 13 bankruptcy lawyer can file a case, even hours before the sale, and stop the proceedings dead in its tracks. This is due to a Federal law called the automatic stay. This is very helpful and can save homes from foreclosure and give you the opportunity for a fresh start.

If your chapter 13 plan offers an affordable installment payment, mortgage companies and their debt collectors can not continue to attempt collections against you or foreclose on your property.  They will have to accept your payments over 36 – 60 months, so long as you can stay current moving forward on your payments.

What happens if I fall behind on my mortgage while in Chapter 13?

If you’re not able to keep up with your monthly mortgage payments, it puts the protection of your case at risk. If that happens, your lender will be able to pursue court orders asking them for access and ownership on the property associated with your Chapter 13 bankruptcy proceeding. However, your Chapter 13 Greenbelt bankruptcy attorney will be able to file a response to the lender’s request and ask the court to allow you additional time to catch up and enter into a stipulation to increase your monthly payments for a short period and allow you to get back on your schedule. At the same time, your Chapter 13 bankruptcy attorney may request your monthly payment to the Trustee be suspended or reduced while you get caught up with the lender.

If your planned payments fall behind on your mortgage and you enter an agreement with the chapter 13 trustee to catch up and stay current moving forward, this allows the chapter 13 bankruptcy to remain in place.  The lender will not be able to sell or foreclose upon your home as long as you remain current on your chapter 13 plan.

The chapter 13 bankruptcy is not a cure-all, so if you are in foreclosure proceedings, your chapter 13 attorney may need to look at other options such as a loan modification and converting your case to a Chapter 7, so that if you do fall behind again, the lender can only take your property, but not sue you for a deficiency judgment.

How do you slow down a foreclosure?

In some situations, bankruptcy is just not an option, that does not negate the help a Chapter 13 bankruptcy attorney can provide. There are often other ways that can slow down or even stop foreclosure in PG County, Maryland, and nearby areas. They may try to work with your lender’s loss mitigation department on a loan modification. This will help you to get your mortgage up-to-date and avoid foreclosure proceedings. If there is no way out, chapter 13 bankruptcy lawyers can make sure that when the foreclosure sale takes place, if the property sells for less than what you owe, you can be protected against subsequent lawsuits to collect the balance.

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Will Chapter 7 Stop a foreclosure?

A chapter 13 bankruptcy attorney can also try to stop a foreclosure when you file chapter 7. This is because once the chapter 7 trustee receives your petition but before he or she makes any attempt to liquidate, they will send a letter to all creditors notifying them of the filing and stay in place for 90 days. If no one objects during that time, a subsequent chapter 13 may be able to stop foreclosure proceedings.

What are my chapter 13 bankruptcy options?

Chapter 13 can lower your interest rate, place you on a repayment plan that works with your budget and try to save your home by giving you additional time to catch up. You will have the opportunity to pay all or part of the missed payments, catch up on late fees and past due amounts over 36 – 60 months through your chapter 13 plan.

This is just the first step and chapter 13 bankruptcy lawyers may be able to offer you additional options that can help protect your home and lower your interest rate.

Jill Phillips
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