Foreclosure is the legal process of selling a home at a public auction to satisfy the debt owed to the mortgage lender. The mortgage lender may also seek a personal judgment against a homeowner for any amount owed to the lender after the home is sold at a foreclosure auction.
If you are facing foreclosure, talk with our Surprise foreclosure attorneys. You may be able to stop foreclosure and save your home by filing a Chapter 13 bankruptcy case.
How Can Filing Chapter 13 Bankruptcy Save My Home in Surprise?
When you file a Chapter 13 bankruptcy petition, all efforts to foreclose on the mortgage must stop. The mortgage lender cannot continue with a foreclosure action. The home cannot be sold at a foreclosure sale. As long as the automatic stay remains in effect, your home is protected in bankruptcy. However, if the court modifies the stay or your Chapter 13 case is dismissed, the mortgage lender can proceed with the foreclosure action.
Through your bankruptcy repayment plan, you pay the past due mortgage payments and any costs or fees added for the foreclosure action. The amount is spread out over your bankruptcy plan. Additionally, you begin making regular payments to your mortgage lender outside of the plan.
Your Chapter 13 plan also includes payments toward unsecured debts and debts that require payment in full through a bankruptcy plan, such as tax debts and back alimony or child support payments. Most plans also include a debtor’s car payment. The amount owed on your car title may be lower in Chapter 13 if you owe more than your car is worth, and you have owned the car for several years.
When you complete your Chapter 13 plan, you may only owe your mortgage. Your car is free and clear, and the bankruptcy discharged your other debts. If you had student loans, that might be the only other debt you may owe in addition to your mortgage payments. Talk to a Surprise foreclosure attorney today about filing Chapter 13 to save your home.
Does Chapter 7 Bankruptcy Help With a Foreclosure?
Cases filed under Chapter 7 do not have a repayment plan. Therefore, if you wanted to keep your home in a Chapter 7 case, you would need to work with the mortgage lender to modify the mortgage, refinance the mortgage, or catch up on the loan payments quickly.
A Chapter 7 case can help if you want to get out from under your mortgage loan. Many debtors who owe more on their home than their home is worth surrender the home through Chapter 7. If you meet the income qualifications and want to give up your home, you could be debt-free in about six months after filing your bankruptcy petition.
A benefit of surrendering your home through Chapter 7 is that the mortgage lender cannot request a deficiency judgment. A deficiency judgment is a personal judgment against you for any money owed on the mortgage loan after the foreclosure sale. If your home has already been sold and the lender received a deficiency judgment, you can get rid of that judgment by filing a Chapter 7 bankruptcy case.
Contact Our Surprise Foreclosure Attorneys for a Free Case Review
It can be difficult to let go of a home. However, that could be in your best interest. Getting out from under a mortgage you cannot afford can give you increased financial freedom.
On the other hand, if you want to save your home and just need help catching up on the payments, a Chapter 13 bankruptcy case may be the right choice for you.