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I'm Behind on Mortgage Can Chapter 7 Bankruptcy Help?

Posted By Allmand Law Firm, PLLC || 22-Jul-2013

Falling Behind on Mortgage Payments

Filing for bankruptcy has helped many debtors save their home by giving them more time to get caught up on payments or even prevent foreclosure. But, if you are considering Chapter 7 as an option regarding missed mortgage payments, you may need to review this with your bankruptcy attorney to see if this will remedy your situation. Chapter 7 bankruptcy may give you more time to negotiate a payment arrangement with your mortgage lender, but there are other options to consider in helping you keep your home permanently.

When you file bankruptcy the automatic stay goes into effect. This halts collection activity by creditors for a limited time while your case is being reviewed. In Chapter 7, this may help you temporarily in seeking an alternative option if you are behind on mortgage payments. If you are financially able you could makeup missed payments or consider payment plan solutions with your lender. For some people, filing Chapter 7 gives them enough time to seek a solution before foreclosure proceedings begin.

Yet, everyone's situation is different and it is understandable when you are unable to make payments. Depending on personal circumstances you may be able to seek loan modification to reduce your payments or arrear missed payments into the new loan. Or, your lender may work with you in reducing interest rates or temporarily lowering mortgage payment amount. Chapter 13 bankruptcy is another option; you can repay creditors under an affordable payment plan approved by the court based on your ability to make payments over a 3 to 5 year period.

Considering Bankruptcy?

If you need assistance in finding out if bankruptcy is right for you, feel free to set up a free consultation by giving us a call or fill out our contact form.


Categories: Foreclosures
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