Got A Notice Of Default From Your Mortgage Lender? Consider Chapter 13 Bankruptcy
Posted on: 11 September 2018
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The rate of foreclosures in the United States has been steadily decreasing over the last several years, but that doesn't mean anything to those who are currently facing foreclosure. If your lender has recorded a Notice of Default at your county courthouse, it's time to take action. One way to try to save your home from foreclosure is to file a Chapter 13 bankruptcy. Here's what you need to know before you move ahead with a Chapter 13 bankruptcy filing.
Automatic Stay Goes Into Effect
When you file bankruptcy, an automatic stay is put into effect. What this means is that your creditors, including your mortgage lender, cannot legally make any attempts to collect your debt nor can they proceed with a foreclosure. While doing this may not save your home in the long run, it will give you some time to figure out what to do.
It's important to understand, however, that your lender is able to file a motion to lift the stay. If this is granted, you may not get the additional time you need to either figure out how to pay what you owe or to find another place to live. It is important, though, to discuss this with a bankruptcy lawyer in your state. Even though bankruptcy law is federal law, most states have additional laws to consider as well regarding bankruptcy and real estate.
Include Your Mortgage In the Repayment Plan
If your lender does not file a motion to lift the stay and your Chapter 13 bankruptcy is granted, you will be able to set up a payment plan through the bankruptcy trustee who is assigned to your case. With the help of your bankruptcy lawyer, you can submit a proposal that states how much time you'd like to take to repay the missed mortgage payments and other secured debts that you owe.
Keep in mind that you will need to make your current mortgage payments at the same time that you make the payments on the repayment plan. If you miss any of the current mortgage payments after filing bankruptcy, your lender may be able to restart the foreclosure process from where it was stayed, depending on state laws. Because of this, you will need to be cautious in the proposal you submit. Essentially, don't try to overdo it. Keep the repayment plan as minimal as allowable. Speak with a bankruptcy attorney office like Molleur Law Office for more information.