If you’ve fallen behind on your mortgage payments, there’s no worse feeling than knowing that the threat of foreclosure looms over you and your family. While many debtors work with a bankruptcy lawyer to prevent or stall the foreclosure process, why not use the opportunity to catch-up on your mortgage? If you can continue making mortgage payments or if you foresee your financial situation improving within a few months, a bankruptcy could be your tool to get back on track with your mortgage payments.
Chapter 13 Helps Organize Mortgage Payments
When working with a Cincinnati bankruptcy lawyer to file for Chapter 13, one of the immediate benefits is automatic stay, which:
Protects you and your home from creditors.
Stops an impending foreclosure.
Prohibits your lender from continuing any other collection efforts.
Essentially wipes your history in terms of late payments.
A bankruptcy lawyer can help you achieve a fresh start through a Chapter 13 filing, protecting your home. However, once you file for Chapter 13, it’s crucial to establish a manageable repayment plan that you can stick to. While working with a bankruptcy lawyer to file for Chapter 13 can protect your home, falling behind on mortgage payments again could resume foreclosure proceedings and essentially void the benefits of Chapter 13.
With the help of a bankruptcy lawyer, you can reorganize your mortgage payments so that you have 3-5 years to get back on track. Generally, 5 years is the limit for re-establishing your mortgage payments. Working with a bankruptcy lawyer can help you determine whether or not it is even possible to fix your mortgage situation through Chapter 13. Remember, the success of Chapter 13 rests almost entirely on your financial ability to repay your mortgage loan.
Since Chapter 13 doesn’t discharge the outstanding debt, you and your bankruptcy lawyer must review your financial situation to ensure that you can eventually afford your mortgage payments. Whether you fell behind or faced an uncontrollable circumstance such as job loss, your ability to make mortgage payments should be the primary consideration behind a Chapter 13 filing to protect your home.