Although bankruptcy is a major financial decision, it can be one that allows you to keep your house. However, you can still protect your home by filing chapter 13 bankruptcy. Filing bankruptcy is a complex balance between what you owe and what you have. Good news: Bankruptcy can help you protect your home and prevent foreclosure. Actually, Bankruptcy and foreclosure go hand and hand. Filing Chapter 13 bankruptcy allows you to keep your house, even if payments are late. You should be able to keep your home if you file for Chapter 7.
As we get into the details, remember that bankruptcy is an option for those who have more debt than their income. The bankruptcy courts are committed to making sure that the law against bankruptcy doesn’t lead to putting people on the streets.
Chapter 13. Bankruptcy:
Filing Chapter 13 bankruptcy can help you stop the foreclosure process from starting and save your home. Chapter 13 bankruptcy is a repayment plan bankruptcy. It allows the filer to take the time necessary to pay off their arrearage before the clock runs out. It does this without the need to make large lump-sum payments, which can be difficult for many.
The court uses the Chapter 13 bankruptcy plan to determine a couple’s disposable income. This is calculated by taking into account their monthly income after taxes, deductions, and living expenses. The court approves this disposable income as the basis for a repayment plan. This plan typically lasts between 3 and 5 years. Payments are made directly to the Chapter 13 Trustee who will then send them to your creditors.
You will have to pay the mortgage arrearage at the end of the plan. However, you won’t need to make a large lump sum. The best part? You may only have to pay a small percentage of other debts if you are able to prove that you cannot afford them. The plan also covers most of the costs associated with legal fees. Remember that you won’t have to pay high credit card minimums or ridiculous interest rates during the plan. The debt will be paid off after the plan is completed.
The Automated Stay:
Chapter 13’s “automatic stay” is the best part of Chapter 13. It goes into effect when you file your case. The automatic stay is an invisible shield that the bankruptcy code creates to protect you against creditors. It stops them from trying any further collection attempts. This includes stopping foreclosure proceedings. Although it is best to not wait until the last moment to file, I have seen clients file their papers the day before the sale date to save their homes from foreclosure. The automatic stay stops harassing phone calls and prevents repossessions. It also restores utility services. Wage garnishments are also stopped.
After your case has been filed, you will need to continue making your monthly payments to the mortgage company as scheduled. Failure to do so could result in the automatic stay being “lifted” which would allow the mortgage company’s foreclosure process to move forward.
Additional Benefits Of Chapter 13:
- You can stop the repossession of a vehicle that is in default and allow you to make the vehicle payment under your plan. In some cases, this can also have the additional benefit of lower interest rates and spreading the payments over the term of your plan so that you pay less monthly. Your attorney may be able to bi-furcate your auto loan claim so that you pay only the car’s value and not the loan amount.
- You can also give up an upside-down boat, boat, camper, ATV, or other secured property. Any remaining debt can be treated as unsecured and can often be discharged at your case’s conclusion.
- Reduce the interest rates on your credit cards to consolidate your debt.
- Filing Chapter 13 bankruptcy could also permit you to keep property that you might have lost under Chapter 7. This includes a boat that you paid for or a vehicle with equity that is greater than the exemptions that the state provides for this particular property.
Contact Bruner Wright P.A.
Bruner Wright P.A. is a top-rated experienced law firm servicing the Florida Panhandle and the South Georgia area. Our practice has been very successful in helping people discharge their debts and handle both bankruptcy and foreclosure. We offer a personal service that is comprehensive and thorough in all aspects of our industry. We are responsive to the needs of our clients.
Our Service Areas
- Tallahassee Fl
- Douglas Ga
- Brunswick Ga
- Augusta Ga
- South Georgia
- The Florida Panhandle
Contact us today to schedule a consultation to speak to a bankruptcy attorney about bankruptcy and foreclosure. A member of our team will review your case to help you make the right choice. We are focused on personal chapter 7 bankruptcy, chapter 13 bankruptcy foreclosure, and business bankruptcy chapter 11. We want you to achieve financial stability.