Using Bankruptcy as a Way to Keep Your House
Over the past 16 years, one of our great pleasures has been helping residents along the Gulf Coast keep their houses. In today’s tough economic times, its fairly easy to fall behind on your house payments and have to deal with non-responsive mortgage companies threatening to take your house or even filing a foreclosure lawsuit to actually take your house.
It is a common misconception that when a mortgage company files a foreclosure lawsuit you have to move out of your house. NOT TRUE!
Chapter 13 Bankruptcy Can Help You keep Your House
Chapter 13 bankruptcy can help residents along Florida’s Gulf Coast that have missed mortgage payments catch up on the missed payments and stop or prevent a foreclosure. As long as the bankruptcy case is filed prior to the actual foreclosure sale date, it allows you to stay in your home and it stops the foreclosure. There are two options we can use in Chapter 13 to help you stay in your house:
Option 1 – Catch Up Method
The Catch Up Method allows you to propose a repayment plan to pay back the past due mortgage payments over a 3 to 5 year period. At the same time, you must begin making your regular mortgage payments again. You may be thinking, “how in the world can I do this and still pay my other debts?” Good question! Chapter 13 allows us to include or consolidate your other debts (i.e. credit card bills, medical bills, payday loans) in the plan but only pay those at a discount. This plan allows you to use your money that was paying your credit cards to help fund the house payment.
Option 2 – Mortgage Modification
Mortgage Modification is available in Chapter 13. This method allows you to propose a repayment plan which modifies your mortgage. Instead of catching up the past due payments and making your regular mortgage payment, this alternative may allow you to change the payment terms, interest rate, principal balance, and place past due payments at the end of the loan. If a modification is accepted, the new mortgage payment would be paid into the bankruptcy court for a 3 to 5 year period and forwarded to the mortgage company. This plan would also include your other debts as described in Option 1 above. We can use this method even if you have already done a modification or have been denied a modification.
Do not give up. Let us help you set up a plan to keep your house. Lewis & Jurnovoy, PA offers a free consultation to review your specific situation and recommends solutions to achieve your goals.
Steven D. Jurnovoy
Lewis & Jurnovoy, P.A.