Save your Home from Foreclosure through Chapter 13 Bankruptcy
If you have received a foreclosure notice or complaint from your lender, you may be able to save your home by filing for Chapter 13 bankruptcy. Chapter 13 will stop the foreclosure action and give you time to cure your mortgage arrearage. The bankruptcy code is a powerful tool that will allow you to save assets while getting relief from the creditors.
In Kentucky, a lender must file a foreclosure lawsuit in state court to foreclose on your house. When you file a Chapter 13 bankruptcy, your lender is prohibited from continuing on with the lawsuit and the foreclosure sale. In addition to stopping the foreclosure sale, Chapter 13 bankruptcy will give you the change to catch up on your missed mortgage payments and save your home. You can do this be making monthly payments to the bankruptcy trustee over a long period of time (up to five years). The bankruptcy trustee will then pass your payments on to the lender to catch up on your missed payments. While you cure your arrearages you will also continue to make your regular mortgage payments during bankruptcy.
In addition to catching up on missed mortgage payments, Chapter 13 bankruptcy may help you do the following:
- Remove or “strip off” a second mortgage on your home
- Remove any Judgment liens recorded against your home
- Pay off any taxes which you owe
- Reduce the interest you are paying on a car loan
- Create a plant to eliminate all your unsecured debt, many times for much less than what you owe now
If you have received a foreclosure notice, realize you are not alone. Thousands of foreclosures are filed every year in Kentucky. While you should not panic about a foreclosure lawsuit being filed, you should start to ask yourself the following questions:
- What is your long-term goal with the home?
- Can you afford your home?
- Do you want to stay in your home?
If saving your home is your goal, Chapter 13 may be the right choice for you. I have a lot of experience with both bankruptcy law and foreclosure law and can help guide you through the process. Contact me today for a free consultation to discuss all your options.