Foreclosures have actually been on the increase since 2008. From 2007 to 2009 around 3 million property owners were dealing with foreclosure. That number has tripled in size. This real estate collapse integrated with economic difficulties and countless property owners being “upside down” or “underwater” in their homes has caused a real estate crisis in the United States.
Americans are turning to filing Chapter 13 bankruptcy in order to stop an impending foreclosure sale. The original purpose of Chapter 13 bankruptcy was to enable a person who was facing monetary ruin to place all of their financial obligation into one big amount which would then be reorganized and paid off one month at a time over a 3 to 5 year duration.
In general, a Chapter 13 bankruptcy requires more than just a house being “underwater” for a court to rule in your favor. If your earnings is adequate for making your home loan payments and you have no genuine noteworthy financial obligation, then you most likely will not get approved for a Chapter 13 bankruptcy. Of course, your circumstances might be different or there might be other conditions that use. But merely being “underwater” by your mortgage loan and behind on your payments is usually not enough to qualify.
If your monetary situation is momentarily in disorder because of unanticipated costs, medical emergencies, major car repairs, etc., notifying your loan provider is vital. It is very possible that the loan provider may use a short-term deferment of your payments or supply you with re-payment terms which allow you to briefly minimize your payments owed in return for an extension of your home loan. Contacting a skilled, well-informed lawyer– a real expert in Los Angeles Bankruptcy– can offer you the suggestions and representation you require when facing such a scenario.
Stop Foreclosure with a Bankruptcy Lawyer
When you submit either a Chapter 13 or Chapter 7 bankruptcy, the court automatically issues an order (called the order for relief) that includes an “automated stay.” The automatic stay directs your creditors to stop their collection activities immediately. No excuses. If your home is arranged for a foreclosure sale, the sale will be legally delayed while the bankruptcy is pending– generally for three to four months.
Nevertheless, there are 2 exceptions to this general guideline:
Motion to raise the stay: If the loan provider acquires the bankruptcy court’s approval to proceed with the sale (by filing a “motion to raise the stay”), you may not get the full 3 to four months. But even then, the bankruptcy will normally hold off the sale by a minimum of two months, and even more if the lending institution is slow in pursuing the movement to lift the automated stay.
Foreclosure notification already filed: Sadly, bankruptcy’s automatic stay won’t stop the clock on the advance notification that a lot of states require prior to a foreclosure sale can be held (or a motion to lift the stay can be submitted). For example, prior to selling a home in California, a loan provider needs to give the owner a minimum of 3 months’ notification. If you get a three-month notice of default, and then file for bankruptcy after two months have actually passed, the three-month period will elapse after you have remained in bankruptcy for only one month. At that time the loan provider could file a movement to lift the stay and ask the court for permission to arrange the foreclosure sale. This does not suggest the loan provider’s movement would be given, but it is best to have a skilled lawyer in your corner in an effort to prevent that from happening.
Many people will do whatever they can to remain in their house for the indefinite future. If that explains you, and you’re behind on your home loan payments with no feasible method to obtain current, the only method to keep your house might be to file a Chapter 13 bankruptcy. Chapter 13 bankruptcy lets you pay off the “arrearage” (late overdue payments) over the length of a payment plan you propose– five years sometimes. However you’ll need sufficient income to at least fulfill your current home mortgage payment at the same time you’re settling the arrearage. Assuming you make all the needed payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your house.
2nd and 3rd home mortgage payments:
Chapter 13 might likewise assist you remove the payments on your second or 3rd home mortgage. That’s because, if your first home mortgage is secured by the whole worth of your home (which is possible if the home has dropped in value), you may no longer have any equity with which to secure the later mortgages. That permits the Chapter 13 court to “remove off” the 2nd and third mortgages and re-categorize them as unsecured debt– which, under Chapter 13, takes last concern and frequently does not have to be repaid at all.
If you are facing enormous financial obligation and monetary mess up that is just worsened by your home loan payments, then you need to call us. We are Bankruptcy Expert, at for a Free Assessment.