How Chapter 13 Bankruptcy Can Help with Foreclosure
If you are facing a foreclosure, it’s likely that you are struggling with other debts as well. Chapter 13 will not only allow you to catch up on past-due mortgage payments, but vehicle payments as well. Chapter 13 can effectively stop a vehicle repossession in the same way it can stop a home foreclosure.
Chapter 13 will also include unsecured debts like medical bills and credit cards. These types may not have to be paid in full in your plan before discharge, depending on your income and other debts. Your payment plan will be calculated using the full balance on arrearages, a financed vehicle, your mortgage payment in some jurisdictions, fees to the trustee, your attorney’s fees if your attorney agrees to work them into the plan instead of taking them up front, and a portion of your unsecured debts.
What Happens to Renters in a Foreclosure
If you are renting and your landlord loses the property in a foreclosure sale, in most circumstances you will still be protected by your lease. As long as you are still paying rent, the new owner is more likely to continue accepting checks rather than evict you. They may also offer you a financial incentive to move after the foreclosure sale has been completed.
Rules on how renters are treated after a foreclosure sale vary by state. Additionally, there may be a clause in your lease stating you must move if the property is sold through foreclosure. You should review your lease and consult an attorney if your landlord is facing foreclosure.
Don’t Wait Too Long to Get Foreclosure Advice
As mentioned above, it is nearly impossible to get your home back after a foreclosure sale has occurred. For this reason, you should consult an attorney as soon as your receive a Notice of Foreclosure Sale, if not sooner. An attorney will be able to help you determine the best way to save your house, which chapters you qualify for, and estimate Chapter 13 monthly payments.
If cost is an issue, know that you can consult with an attorney free of charge. Our firm offers free consultations over the phone so you don’t even have to leave the house. Call to get started today!