Chapter 13 Bankruptcy and Mortgage Arrears
One of the major reasons people file for Chatper 13 bankruyptcy protection is because they are significantly behind on their mortgage payment. Sometimes the individual is expecting a foreclosure notice, sometimes they have already gotten one. Either way, chapter 13 bankruptcy is an excellent way to protect your house, and keep it out of foreclosure.
As soon as you file a chapter 13 bankruptcy case, your house is protected. So if you had a foreclosure date set on the house, as soon as you file, that’s null and void (unless there are recent multiple bankruptcy filings).
The process is usually that you file for protection, then immediately after, start making your regular mortgage payment. In chapter 13, whatever you are behind gets lumped together and put in a chapter 13 bankruptc plan. You will make a payment to a bankruptcy trustee. That payment will pay off the arrearage. So what happens is that when the plan is done, you are now current on your home.
Many enter into chapter 13 for various reasons. But is is an excellent way to save your home if you experienced a period of finanical difficulty and got behind on mortgage payments.
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