When you’re facing financial difficulties, bankruptcy can seem like a scary option. When bankruptcy is looming, you may be focused on protecting your home. If your goal is to prevent or delay foreclosure on your home, Chapter 13 bankruptcy may be the right filing for you.
Unlike other types of bankruptcy, Chapter 13 bankruptcy is focused on creating a manageable repayment schedule. Chapter 13 does not force you to forfeit your valuable assets.
How long will Chapter 13 delay foreclosure? Ultimately, that’s up to you. A Chapter 13 repayment plan will require you to repay your missed mortgage payments. It will also require you to stay on top of your current mortgage payments.
If you are able to do both, then the foreclosure proceedings on your home will be stopped indefinitely. As long as you do not miss any payments after you file Chapter 13 to stop foreclosure, you may be able to protect yourself for the long term.
Our team at Brenner Spiller & Archer has helped hundreds of families in New Jersey craft Chapter 13 plans to stop foreclosure. In this post, we will walk you through what Chapter 13 bankruptcy is. We will also discuss how filing Chapter 13 bankruptcy may help you.
What Is a Foreclosure?
After a certain number of missed mortgage payments, your lender may foreclose on your property. Foreclosure is the legal process by which the lender can be made whole.
During a foreclosure, the lender is allowed to sell the borrower’s home to fulfill the borrower’s debt. Each state’s foreclosure process varies slightly. Be sure to speak with knowledgeable counsel in your area if you believe your property is at risk.
Neither lenders nor borrowers like the foreclosure process. It is time-consuming and expensive, and rarely do lenders recoup enough money to fulfill the borrower’s outstanding debt. If you are worried that you cannot pay your mortgage, reach out to your lender before missing a payment. Before you file Chapter 13 bankruptcy to stop foreclosure, you may be able to work out a repayment plan with your lender.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy creates a repayment plan that combines all your debts into one payment. Debtors often find this single payment easier to manage. A bankruptcy trustee oversees the “bankruptcy estate” and monitors your repayment progress.
How Do I File Chapter 13 Bankruptcy to Stop Foreclosure?
When you file for bankruptcy of any kind, an automatic stay is put on all your debts. If your lender is attempting to foreclose on your home, they will be ordered to stop until your case is dismissed or the stay is lifted.
When you file specifically for Chapter 13 bankruptcy, a trustee will create a repayment plan that slowly pays off all or some of your debts. This should include any missed mortgage payments. An experienced bankruptcy lawyer, like a member of the Brenner Spiller & Archer team, can help you with your filing in New Jersey bankruptcy court.
How Much Does Chapter 13 Bankruptcy Cost?
When considering whether to file Chapter 13 bankruptcy to stop foreclosure, you will need to consider the cost of repaying missed mortgage payments. As mentioned, Chapter 13 bankruptcy plans usually last 3-5 years. You will need to determine if your payments in arrears would be affordable in a bankruptcy plan of this length.
If it would not be possible for you to repay your debts in this time period, Chapter 13 bankruptcy may not be the best option for you. Speak with a bankruptcy attorney about strategies to protect your home. A bankruptcy attorney can also help you calculate your exact costs if you do file Chapter 13 bankruptcy.
How Brenner Spiller & Archer Can Help
At Brenner Spiller & Archer, our team has over 35 years of experience assisting our clients with bankruptcy matters. This provides us with a big law firm knowledge base and still allows us to provide our clients with the small firm client experience. We have developed the expertise to help you navigate through some of the most challenging times in your financial life. Contact us today for your free consultation.