If you find yourself behind on your mortgage and in fear of losing your home, chapter 13 bankruptcy may be a good option to catch up or obtain a modification on the mortgage. In Chapter 13 bankruptcy, you can have up to 5 years to pay back the missed payments you owe on your mortgage. During the time, there is an automatic stay, and your lender cannot foreclose on the mortgage. Even if your mortgage is already in foreclosure, a bankruptcy can stop the foreclosure case while you catch up on your payment or while you seek a mortgage modification.
In order to catch up on the mortgage, you will have to start making your regular monthly payments together with a payment towards the arrearage that you owe. For example, if you are $20,000.00 behind on your mortgage and your regular payment is $1500.00 per month, you will have to pay your regular payment of $1500.00 per month and an additional $333.33 per month towards the arrears. In addition, these payments bust be paid through the chapter 13 plan to the chapter 13 trustee with an additional 10 percent fee.
If you suffered a loss of income and feel behind on your mortgage and are now back to work and able to make your payments, you should discuss your situation with a bankruptcy attorney to see if chapter 13 can help you keep your home. At Holland Law Group, we have experienced bankruptcy attorneys that can advise you all your options and whether bankruptcy will be helpful for you.