Chapter 13 Bankruptcy is usually the best option for individuals that need to file bankruptcy and also want to keep their home and continue with their mortgage.  Millions of individuals took advantage of the forbearance plans during the COVID-19 health pandemic which allowed them to miss mortgage payments for a certain period of time.  In the short term, this was immensely helpful for struggling homeowners, but once the forbearance plan ended it was an entirely different story.  Most loan servicers required all missed mortgage payments to be paid immediately after the end of the forbearance period.  

If someone was struggling to make payments before the forbearance period, how in the world could they come up with 6 months of missed mortgage payments all at once?  Also, many people were already behind at least one mortgage payment before the forbearance period began.  Loan officers only offering an option of paying the missed payments back all at once has been a calamity for many people.  For many homeowners in this position, a Chapter 13 Bankruptcy is a great option to explore.  Chapter 13 allows you to get caught up on your missed mortgage payments and creates a plan for you to start making your normal mortgage payments again.  

Chapter 13 Bankruptcy usually gives you 3-5 years to catch up on your missed mortgage payments so it’s a great choice for people who are behind in their payments.  Chapter 13 bankruptcy differs from Chapter 7 in that it has a mechanism that will allow you to help you keep your house.  It allows you to get caught up on your late payments and create a plan to help save your home.  Because Chapter 13 plans usually last up to 5 years it creates an affordable plan for debtors to catch up on their missed payments by stretching the arrears over a long repayment period.  One requirement of a plan of this type is you have to make the payments on time and continue to keep up your ongoing mortgage obligations.  While your Chapter 13 case is proceeding you will be required to continue making monthly payments to your mortgage company.  Before you file your bankruptcy case in court and propose a repayment plan it is so important to consult a local Montgomery bankruptcy attorney in order to learn more how the bankruptcy court treats mortgage payments in Chapter 13 bankruptcy.

Filing for Chapter 13 bankruptcy does not stop you from making your monthly mortgage payments.  On the contrary, while your case is proceeding you must make your monthly mortgage payment if you want to keep your home.  Once you file for Chapter 13 bankruptcy an automatic stay will go into effect that prevents your mortgage lender from continuing or initiating any foreclosure proceedings against your home.  But if you don’t continue to make your monthly payments, a lender can request the court to lift the automatic stay.  If you want to keep your home and are very behind on your payments it is important to file Chapter 13 bankruptcy protection so you can stop any foreclosure proceedings.  As said previously, you can stay in your home as long as you can make your regular mortgage payments.  Chapter 13 bankruptcy allows individuals to keep their homes and to get caught up on their missed payments and stop any foreclosure proceedings on their home.

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