A mortgage arrear problem arises the moment you fail to make a full mortgage payment or a partial repayment the date that it is due. Resolving mortgage arrearage requires filing a Chapter 13 bankruptcy. Chapter 13 bankruptcies are often referred to as a reorganized bankruptcy because it allows you to reorganize your debts in a way that makes them more manageable. If you file for bankruptcy because you are behind on mortgage payments, it will put a stop to any actions by creditors, which gets you an automatic stay on any foreclosure sale of your property.
You might be wondering, how Chapter 13 can help you pay off your mortgage. Below are a few benefits to expect:
- It helps regular income individuals by proposing a monthly repayment plan.
- It enables you to rearrange your arrears and pay them off through installments.
- The installment period is determined by the court and may range from three to five years.
- Creditors may not make any debt collection attempts during this time period.
Four weeks after filing a petition, you should expect a Trustee to judge and assess your income and other financial matters. After their assessment, the trustee will present your case before a judge. If the trustee finds that you are complying with the bankruptcy law and properly utilizing your disposable income to repay your debts, he will confirm and approve your case. You must make regular monthly mortgage payments to your mortgage company and to the trustee for the successful running of Chapter 13.
There are a few things to keep in mind if you choose to go the route of filing for bankruptcy. Your lender will monitor the agreement on a daily basis to check for any hiccups. You must show that you are complying with all the terms and conditions or they will take action against you.
What to Avoid After Successful Filing of Chapter 13?
When your Chapter 13 case is approved by the court, you have some obligations to perform for the successful advancement of your bankruptcy case. You must not forget to pay your monthly installments to your mortgage company and your trustee if you want to remain protected under the Chapter 13 conditions. With any violation of any bankruptcy act, the mortgage company can file a case in court against you. The company may challenge an automatic stay on your property and a foreclosure sale of your property may proceed.
If you fail to pay or miss any of your monthly installments to your mortgage company or to your trustee, the bankruptcy court may dismiss your bankruptcy case and you are no longer protected under Chapter 13. You must avoid all these violations to get rid of your mortgage arrearage. It is a difficult reality to imagine losing your home due to circumstances that you have no control over. It is important to know that every problem has some kind of solution.
The very first step, if you are behind on mortgage payments is to consult with a bankruptcy attorney to inquire about your Chapter 13 bankruptcy in a legal manner. The Goldbach Law Group is dedicated to helping you save your home!