Chapter 7 bankruptcy is a liquidation bankruptcy. A Chapter 7 will typically eliminate:
In most cases consumers will keep all of their property. If you are facing foreclosure on your home, the automatic stay created by your Chapter 7 filing serves as a temporary defense against foreclosure. As opposed to Chapter 13 bankruptcy, Chapter 7 will give you a fresh start, but will not provide you with the opportunity to catch up with your mortgage payments.
However, Chapter 7 bankruptcy will allow you to discharge, or eliminate, any deficiency balance owed to your mortgage company if your home is sold for less than the outstanding balance owed to the mortgage company.
The biggest difference is that a Chapter 7 bankruptcy does not provide for the repayment of any debt. Chapter 7 cannot stop a mortgage company from foreclosing on property. Chapter 7 will temporarily delay the foreclosure proceeding, but it cannot provide the long-term protection of Chapter 13 because no plan to repay the mortgage delinquency is proposed.
Mortgage companies continue to foreclose on American homes at an alarming rate. The real estate market boomed in the late 1990’s and early 2000’s. Property values soared and homeowners cashed in on their new found home equity. However, interest rates have climbed, the real estate market has cooled and homeowners realize it’s a buyer’s market. Some homes will sit on the market for six, nine or twelve months. The asking price goes down and homeowners inch closer to the edge of foreclosure.
Many consumers do not understand that the bankruptcy code can help them save their homes from mortgage foreclosure. Chapter 13 bankruptcy is a very powerful tool that can save your home if you have fallen behind on your mortgage payments and you want to rescue your home from mortgage foreclosure.
What is a Mortgage Foreclosure:
Foreclosure is the legal proceeding in which a bank or mortgage company takes title to real estate due to the homeowner’s failure to make the agreed mortgage payments.
The downward spiral into foreclosure begins when your loan payment becomes 16 days overdue. At that point, your mortgage lender may try to contact you to work out a repayment schedule to bring your loan current. If your payments fall 90 days behind, the mortgage company will likely refer your mortgage to an attorney that will start formal foreclosure proceedings.
Chapter 13 bankruptcy is designed to stop foreclosure. In fact, stopping mortgage foreclosures is the driving force behind many Chapter 13 bankruptcies. As soon as you file Chapter 13 bankruptcy an “automatic stay” goes into effect. This “stay” stops your mortgage company from continuing to foreclose on your home. Your mortgage company cannot contact you in regard to your pre-filing mortgage arrears (the amount you are behind on the mortgage) while you are in the Chapter 13 bankruptcy.
Once you prepare a Chapter 13 plan with your attorney, you will file a Chapter 13 petition for relief and the foreclosure proceeding will stop. The bankruptcy trustee will then recommend your Chapter 13 plan for confirmation and the bankruptcy court will approve a repayment plan that allows you to get current on your mortgage over a three to five year period. You must make all current mortgage payments that come due after the Chapter 13 bankruptcy petition is filed.
Homeowners must make all mortgage payments that come due during the Chapter 13 plan. If you fail to make your post-filing mortgage payments the mortgage company can ask the bankruptcy court to lift the protection of the automatic stay and the mortgage company can resume the foreclosure proceeding if the judge agrees with the mortgage company. The possibility of refinancing your mortgage after you have gotten back on track with your Chapter 13 plan is a real possibility for many consumers
Generally, the Chapter 13 bankruptcy must be filed before the mortgage company sells your home. However, if you find yourself behind on your mortgage payments you ought to call an experienced attorney to explore all of your options before the situation spins out of control. The Chapter 13 bankruptcy filing gives homeowners the time they need to catch up on their mortgage payments.
You can file a chapter 13 bankruptcy to stop a mortgage foreclosure, provided you:
Chapter 13 plan payments are fixed so that you can meet all your living expenses first and then pay any surplus income to creditors. Mike and Chad can help you structure a repayment plan that works for you and your creditors.
A provision that allows the lender to call the entire balance of the mortgage loan when the borrower fails to make some installment payments.
A written statement usually given while under oath or in the presence of a notary.
The process by which a licensed person gives an estimate of property value.
The annual interest rate covering the interest and other costs. The Truth in Lending Act requires lenders to announce the APR.
The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).
Large installment payment required at the end of the term of the mortgage note to pay off the entire mortgage balance.
The amount for a foreclosed property for sale at auction.
A title that is not burdened with encumbrances or defects.
A signed document that shows ownership in property and allows the transfer ownership of property from one party to another.
A transfer of title by the borrower to the mortgage company upon foreclosure.
An instrument signed by a borrower, lender and trustee that conveys the legal title to real property as security for the repayment of a loan. The written instrument in place of mortgage in some states.
A mortgage is in default when the borrower fails to make the payments as agreed to in the original promissory note.
A judgment against the borrower for the balance remaining after the property is sold at auction or foreclosure sale.
Mortgage, lien, tax, or any restriction on the use of land.
The value of real estate less the outstanding mortgages and debts pledged against the property.
The price that property would sell for on the market.
Common term used to indicate complete legal ownership of a property.
Federal Housing Administration under U.S. Department of Housing and Urban Development (HUD).
Legal action taken by the lender when the borrower fails to pay monthly installments.
Period between the due and the overdue date during which no late payment penalty applies to the mortgage payment.
Insurance against the destruction of the property.
A foreclosure that is processed by a court action.
A formal description of real property so that one can locate it by reference to government surveys or approved recorded maps.
A claim, or mortgage, on real estate for payment of debt.
A written pledge that uses real estate to secure repayment of a loan.
A notice giving specific information about the loan in default and the proceedings about to take place. This notice must be recorded with the county where property is located and advertised as stated in the security document or as dictated by state law.
An order signed by the judge confirming the sale of foreclosed property.
To publish, announce or advertise by physically attaching a notice to an object.
Paying off one mortgage loan by obtaining a new mortgage loan.
A borrower’s right to reacquire property lost due to a foreclosure. This right allows the owner to recover property lost to a foreclosure judgment, or sold after a foreclosure sale, within a certain period of time. The redemption period varies among the states.
A recorded document requiring a trustee to send a copy of a Notice of Default or Notice of Sale concerning a specific deed of trust in foreclosure to the person who filed the document.
A deed showing ownership to real estate.
An auction of real property conducted by a trustee. Also referred to as a Sheriff’s Sale.
Call our offices at 1-888-222-5615 for immediate assistance or email.
Let’s have a brief no pressure call to see if our free consultation is right for you. Fill out the form below and we’ll get in touch with you right away
We take your privacy very seriously. We’ll never share your information with anyone.
As a customer I was very glad with the level of service I received. I was both nervous and ashamed that I was going through the process of filing. My attorney was nonjudgmental, professional, and very knowledgeable. I had lots of questions and he patiently answered each of them helping me feel more confident in my decision making. I was unable to pay all fees up front and was happy to learn that there was a payment option where payments were deducted from my account until paid in full. Upon my final payment the process ran quickly and smoothly. I always felt like my best interest was at the forefront front the filing process, followup phone calls, reminder phones calls, the court date and discharge. I called the offices 3 years after filing and still, they were welcoming, supportive and informative even though I am not a current customer. This was the first step to me reestablishing myself as a conscious borrower and consumer.
Both Cad and Michael were fantastic!!! They were dedicated and very helpful during my entire bankruptcy. Every step was explained as well as any question that I had (even if I asked three or four times) got answered. I would recommend this team to anyone that needs to swallow their pride and file bankruptcy.
My husband and I hired Debt Advisors to help with our bankruptcy back in 2010. They made it simple and easy then. Now 10 years later we needed information regarding our bankruptcy and they still make things simple and easy. I have and will recommend Debt Advisors to anyone that needs help. Thank you to Debt Advisors for helping my family plan for the future.
Even one year later Debt Advisors continue to help by making it easy to access archived information. This experience with this service and it's staff has been stress free from day one. I recommend this team if you want thorough and excellent service like old times.
My experience with debt advisors law office was an excellent experience. Chad and his partner we're very knowledgeable and their staff was very helpful through my whole process. As We Know this type of experience bankruptcy can be very trying and stressful however Chad and his staff made it a lot easier on me and I felt they did a wonderful job. I would recommend to anyone.
A few years ago I found myself drowning in debt, after doing some research I decided I would get some help in dealing with that debt, so I reached out to Debt Advisors Law Offices. I was scared, nervous, and embarrassed that I had gotten to this point but after my first meeting with Debt Advisors I knew I was making the right decision. They made me feel comfortable and confident in my decision to move forward. The best part was it was all on my time, I felt no pressure from them which was amazing. They were always available to answer my questions and help me through the process. A couple years after my case closed, I reached out to get some information and within that same day they responded to me and remembered me! Truly a wonderful firm to work with!
Best place to relieve your debt. Debt Advisors offers a seamless process which is both worry and stress free. Flexible payment options and quick turn-around. The staff is very knowledgeable and goes above and beyond to deliver satisfaction!....Hands down Debt Advisors is the BEST!
Greg and his staff are great! They made the whole process easy and made everything clear to understand. You don’t second guess nothing. They are with you every step of the way and if you have any questions they definitely have the answer for you.
Greg and Jeremy strategized the best timing for filing based on the variables changing throughout my divorce process. The team counciled me several times on the various benefits and potential risks while we navigated the best solution specific to my particular situation. I would fully recommend their expertise and their customized approach of how they manage their clients financial recovery.
These people are great! They have been so helpful and polite, even during my most stressful moments. I’m sure I got on their last nerve! But they remained courteous and helpful to the end!