Can a Chapter 13 Bankruptcy Save My Home from Foreclosures? If your bank sent you a notice of impending foreclosure, you may still be able to keep your house by declaring Chapter 13 bankruptcy—as long as you can fulfill the criteria for a conformable repayment plan. Chapter 13 bankruptcy in Montgomery can halt a foreclosure while giving you some time to correct a mortgage default.
The bank cannot immediately sell your home just because you received a notice of foreclosure. Each state has its own laws outlining the steps a lender must take in order to foreclose on a property. When you call a local Millbrook bankruptcy attorney, they can explain the process.
In some areas, the process known as judicial foreclosure necessitates that lenders file a complaint in state court before they may foreclose on your home. Others enable a lender to foreclose a loan outside of court using a shortened procedure called nonjudicial foreclosure. In either scenario, your lender must notify you of the impending foreclosure before selling the property. Depending on the state, the lender may have to wait as little as a few weeks before the sale. If your bank sends you a notice of impending foreclosure, carefully read it to determine how much time you have before the lender auctions off your house. You’ll probably want to get moving as soon as you can.
An order known as the automatic stay prevents your lender from holding the foreclosure sale after you file for a Prattville Chapter 13 bankruptcy. Most creditors, including your mortgage lender, are prohibited from pursuing further collection efforts due to the automatic stay unless additional court approval is obtained first. Your property, such as your home, will probably be yours to keep if you file for Chapter 13 bankruptcy. However, you are obligated to pay back creditors an amount equal to the value of your non-exempt property.
You provide the trustee all funds, and he or she will pay the debtors. This implies that once Chapter 13 protection has been granted, you won’t be able to contact your creditors directly.
So long as it hasn’t already been sold at a foreclosure sale, you’ll have a chance to keep your house.
Chapter 13 bankruptcy allows you the chance to correct your mortgage default and save your property in addition to stopping the foreclosure auction. Once the automatic stay is in effect, you can use your Chapter 13 repayment plan to make up any missing mortgage payments. Your plan may last up to five years, giving you an economical opportunity to correct your default over an extended period of time.
By sending a bankruptcy trustee your regular plan payments, you can make up your arbitrages. The monthly catch-up payment indicated in your plan will then be sent by the trustee to your lender. You’ll continue to make your monthly mortgage payments as you work to cure your default. You can keep your house once the plan’s payments are all made and you are no longer in default.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!