Just because you have received the foreclosure letter, it doesn’t mean that you have lost your home. In fact, by filing for Chapter 13 bankruptcy, you can stop the foreclosure and save your property. Chapter 13 gives you another chance to pay your mortgage arrears before the bank sells your home. We at SM Law Group can help you through this process.
Lenders are required to give a notice to their borrowers. They have to inform the borrower that their payments are in default and that they face the risk of foreclosure. The lender has to wait for some time or get a court judgment before they can start the foreclosure process. The borrower will be notified when the lender sets a sale date. If you have received a foreclosure letter, you can’t waste any time. If you are confident that you will be able to pay the arrears if you get enough time, you should file for Chapter 13 immediately.
How Chapter 13 provides protection against Foreclosure
Chapter 13 bankruptcy prohibits your lender from selling the home. Creditors including your lender are prohibited from proceeding with any collection attempts without court permission. This gives the borrower an opportunity to save the home provided that it hasn’t already been sold.
Catch up on missed mortgage payments
Besides stopping the foreclosure, Chapter 13 gives you an opportunity to catch up on your mortgage payments through its repayment plan which can last up to 5 years.
How does this work?
You make monthly payments to the bankruptcy trustee to bring pending mortgage payments current. The trustee will pay the lender the catch up payment mentioned in the repayment plan. It should be remembered that in addition to the catch up payment, you have to make regular mortgage payments after filing for bankruptcy. This gives you an opportunity to bring past due payments current.
SM Law Group Can Help
There are certain eligibility criteria to file for Chapter 13 bankruptcy. Contact SM Law Group today for a free consultation.