Debt and financial problems can make it difficult to keep up with obligations,
including the ability to pay a mortgage. For some people, especially those
who bought homes the height of the housing market boom, these problems
can be exacerbated by high mortgage payments for a property that is no
longer worth as much as what was initially paid for the home. An underwater
mortgage, where homeowners owe more than what a home is worth, can be
a troubling and frustrating problem, but there may be options available.
At Allmand Law Firm, PLLC, our Dallas bankruptcy lawyers have experience
helping numerous men, women, and families throughout the DFW Metroplex
address the full scope of their financial problems. Our help goes beyond
debt, and also looks at issues relating to foreclosure defense and underwater
mortgages. If you are currently upside down on your home mortgage, it
is important to remember that you may have options for relief, and that
our legal team is here to help you explore them! These can include options
to mitigate unsecured debt and tax obligations, as well as short sales
and deed in lieu of foreclosure.
For those who want to keep their homes despite an underwater mortgage,
Chapter 13 bankruptcy may be a viable option. Under this Chapter of the
U.S. bankruptcy code, debt is restructured and repaid through a plan that
typically takes between three to five years. Upon conclusion of the plan,
during which you made more manageable payments to creditors, some debts
may even be discharged.
In respect to an underwater mortgage, Chapter 13 can allow you to keep
your home and is often the route taken by debtors who do not qualify for
Chapter 7 bankruptcy. It can allow you to remain in your home and make
payments toward the mortgage rather than simply taking a short sale or
allowing the property to be foreclosed by the lender when walking away
from the house.
The Advantages of Chapter 13 Bankruptcy
Chapter 13 bankruptcy can offer multiple advantages. If you have more than
one mortgage, it can eliminate or remove other mortgages, including liens
on the property. As long as you complete your payment plan under bankruptcy
laws, any liens against your property can be removed.
The repayment plan may include the amount you are behind on with your mortgage
as well as other debts such as your car payment, medical bills, credit
card bills and other obligations. You’ll make a monthly payment toward
your debt based on your income and agreement made with the Bankruptcy Trustee.
Debts, or portions of debt, eliminated at the end of a Chapter 13 case
can free up the funds you might need to keep your financial obligations
and pay your mortgage. In some circumstances, either during the plan or
after, you may be able to pursue other means of negotiating with your
Filing Bankruptcy May Be Right For You
Since each situation is different, it is best to discuss your situation,
options, and whether Chapter 13 bankruptcy may be viable in dealing with
your underwater mortgage with a member of our team. Allmand Law Firm,
PLLC is led by Board Certified Bankruptcy Specialist Reed Allmand, who
founded our firm with the intent to provide all clients with the personalized
support they need to make the best decisions for their financial future.
Get started today with a free financial empowerment session. Contact us
to request an appointment.