Can I File Chapter 13 Bankruptcy and Keep My Home?

From the beginning of 2007 to early 2012, approximately four million families lost homes to foreclosure. In May 2012, U.S. year-over-year foreclosure starts increased for the first time in longer than two years. There were more 1.6 million foreclosures from January through September 2012 and the annual figure is expected to be approximately 2.3 million. Bankruptcy attorneys have seen it all and know how to fight the foreclosure process.

Chapter 13 Can Stop Foreclosure

These statistics indicate that on any given day, thousands of people are trying to stop foreclosure of their homes. The process is stressful, time-consuming, and too often, it has a negative outcome. Homeowners may not think of turning to a bankruptcy lawyer for foreclosure help, but this legal professional may hold the answer. Chapter 13 bankruptcy is one way to prevent foreclosure and buy time to catch up on past-due payments.

Having the home foreclosed on by the mortgage lender can feel embarrassing and leaves the former resident with nowhere to live. Once a mortgage payment is more than 90 days late, it can be difficult to refinance the home. Chapter 13 is an alternative way to handle the situation and it stops the foreclosure process in its tracks for a specified time. The automatic stay issued during Chapter 13 provides breathing room so you can save your home.

Chapter 13 bankruptcy is designed for people with steady income who can afford to repay their debts over time. Debts are reorganized into a repayment plan that lasts for three to five years. Creditors may not take any collection action while the bankruptcy stay is in place. This provides the debtor with time to repay what is owed and get back on track without losing secured debts like a car or home.

Though bankruptcy is never a positive thing, it may be the only way to stop foreclosure. A bankruptcy lawyer will make the process as convenient as possible by helping the debtor draft a repayment plan and proposing this to the bankruptcy court. Past-due mortgage payments can be included in this plan, allowing more time for repayment. Ongoing payments are paid as they come due so the debtor can remain in the home.

Three to five years of repaying debts is usually far less painful and humiliating than losing a home to foreclosure. As long as current mortgage payments are made, the foreclosure will not proceed and the debtor may retain the home. If you are trying to save your home from foreclosure, contact a bankruptcy lawyer as soon as possible.