Buying a home is one of the largest investments you will ever make, so you may feel a great deal of anxiety and worry over losing your house while going through chapter 13 bankruptcy. Thankfully, this is the best case scenario when going through financial hardships, since it allows you to keep your home and other certain assets. Here are a few things to know when filing bankruptcy to save your home.
If you have missed a few mortgage payments and are struggling to pay other debts, you may think you can catch up on these bills eventually. Unfortunately, this is usually not possible due to the accumulation of late fees and the constantly increasing minimum payments. Choosing to file bankruptcy is not an admission of failure, but it is extremely beneficial for stopping the late fees and saving your house before it is too late.
Chapter 13 bankruptcy allows you to pay the late/missed mortgage payments over a designated repayment period. This period may be between 3 and 5 years. Fortunately, your attorney will use your income statements to determine how much you can realistically afford to pay towards the repayments. This ensures you are able to catch up on your mortgage while paying necessary living expenses and other designated debts.
If you are missing mortgage payments, consult your attorney to file bankruptcy proceedings quickly, stopping harassing calls from collectors. Once the initial documents are filed, collectors are no longer able to contact you regarding your home mortgage. In addition, if your home was near foreclosure, all foreclosure proceedings must stop while awaiting approval of the bankruptcy.
This period of time is known as an automatic stay. Once the repayment plan for your mortgage is approved, the foreclosure must stop completely. It is important to note that the initial repayment plan must include plans to repay the late/missed mortgage payments. If the initial plan does not include these repayments, the foreclosure proceedings can continue.
In some situations, the mortgage payoff will be higher than the actual value of the home. This affects the home’s equity, reducing your ability to sell the home to pay off all of your debts. Modifying the mortgage to showcase the home’s real value can reduce the repayment amounts that you will pay after filing bankruptcy.
Not only does this help with the value in your home, but it will also lessen your monthly expenses.
If you are dealing with some financial distress, consult a bankruptcy attorney to learn if it is the right option for you. Contact Collins & Arnove in the Dallas, TX area at 972-516-4255 to learn how chapter 13 bankruptcy can save your home.
Collins & Arnove | Chapter 13 Bankruptcy Dallas TX | 972-516-4255