Save your home from foreclosure with chapter 13 bankruptcy.
May 1st, 2019
Chapter 13 bankruptcy has options for saving your home from foreclosure that might not have occurred to you. When foreclosure starts it's natural to feel hopeless. But consider the possible.
If you are behind in your mortgage payments you may be able to file a "cure and maintain" plan. Starting on the petition date you pay the arrearage over a period up to five years. You also resume making the monthly payments. Obviously, this won't work if the situation that caused you to default still exists. But, often, a default is caused by illness or a period of unemployment. Or another temporary situation that has, or will soon pass.
Another possibility for those with a second mortgage or a "HELOC" (home equity line of credit)....If the appraised value of your home equals the balance of your first mortgage on the "petition date", bankruptcy law allows you to get rid of the second mortgage entirely, using chapter 13. This can only happen if the second mortgage is wholly "underwater". Connecticut real estate values have not rallied significantly since the Great Recession. Worth considering. Wouldn't it make a big difference not to have that HELOC payment every month?
Bankruptcy law does recognize the rights of creditors. It also gives homeowners powers they may not know they had. Most immediately, the automatic stay in bankruptcy will bring a foreclosure (including a foreclosure sale) to a screeching halt.
You might think your situation is hopeless. But there may be possibilities you haven't considered. Are serious about saving your home from foreclosure? If so, you should consult with an experienced bankruptcy attorney. Among other things, we will discuss whether either or both of the above options make sense for you. And there may be other strategies available.
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