If you are in fear of having your home foreclosed,there may be ways to protect it. Typically, debtors whose homes have gone into foreclosure have missed payments because they or a close family member has suffered an illness or serious personal injury. They have not been able to work, and therefore have had little to no income for a long period of time. It is not always easy to put the mortgage payment ahead of spending money for food or medicine.
When you are behind on your mortgage, the amount you owe the bank to bring the loan up-to-date is called the “mortgage arrears.” In a Chapter 13 bankruptcy, we can spread these arrears over a three- to five-year plan and pay your unsecured creditors (credit cards, medical bills, etc.) a percentage of what you actually owe, which should allow you to designate some of your income to catch up on your mortgage. Payments made to the Chapter 13 Trustee will be dispersed to the mortgage company and the unsecured creditors who file claims.
For a Chapter 13 plan to be successful, the future mortgage and tax payments need to be kept current. It is important to speak with an attorney who knows about Chapter 13 bankruptcy and can put a plan together that gives you the best opportunity to succeed.