Chapter 13 Bankruptcy and Foreclosure

As mentioned elsewhere on this website, Chapter 13 can be a life-saving solution if you are facing foreclosure. Because Chapter 13 Bankruptcy allows you to restructure your debt, there are many possible ways that filing for bankruptcy could make your house payments affordable again. Remember, it doesn’t matter if the foreclosure process has already begun – if you can file for Chapter 13, it will halt the foreclosure process and give you time to reorganize your debts. The automatic stay will protect you from any further collection activities, and it will protect anyone who may also be listed on your mortgage from being subjected to collection activities as well.

Options for Preserving Your Home

No one wants to lose a home to foreclosure, and fortunately, a timely filing for Chapter 13 can often do a lot to prevent that occurrence. If the foreclosure process has already begun, filing for Chapter 13 will give you time to negotiate with your lender for more reasonable terms. And if your home is the only expense that is causing you to file for bankruptcy, if you can negotiate more favorable terms with your lender, you may not need to continue your filing for bankruptcy protection after the agreement is reached.

If you can’t reach an agreement with your lender, a Chapter 13 bankruptcy filing may be beneficial in other ways that will help you preserve your home. Whether it’s getting the loan on your car adjusted to reflect the true value of the vehicle, or the ability to repay your back taxes or other priority debts over 3-5 years, filing for Chapter 13 bankruptcy can help you to have more money available to pay off your mortgage. And while in Chapter 13, you will be allowed to pay off your arrears in the same fashion as other priority and secured debts – over the course of a 3-5 year repayment period. 

A third way that an Orange County Chapter 13 bankruptcy filing may help you is if the judge makes adjustments to your mortgage directly. Depending upon your circumstances, the judge may be able to modify the terms of your loan to make your mortgage payments affordable, allowing you to remain in your home as you pay off other debts as well. These loan modifications are permanent, and you will enjoy these savings even after your Orange County Chapter 13 bankruptcy is discharged.

These are only a few of the ways in which a Chapter 13 bankruptcy can help you, and you may have even more options that you may not be aware of. If you are considering Chapter 13 as a solution to your foreclosure problem, contact our Orange County Bankruptcy Law Firm today. We will provide you with a free initial case evaluation that takes into account your unique circumstances – one of our experienced, knowledgeable Orange County Bankruptcy Attorneys will speak with you about your bankruptcy options and whether or not Chapter 13 bankruptcy can help in your situation. Don’t delay – the longer you wait, the more difficult it may be to save your home.