Stop Foreclosure. Get Rid of Your Second Mortgage. What Can Chapter 13 Bankruptcy Do For You?

Aug 16, 2016

The ordinary person doesn’t know a lot about bankruptcy and what it can offer. Usually people start to do research about bankruptcy once they realize that they cannot handle taking care of their mounting debt alone. When a foreclosure notice is received is usually when we receive the phone call wondering what a Chapter 13 Bankruptcy can do to save the home.

What is a Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is different from a Chapter 7 Bankruptcy because it lets you get caught up on your secured debt as well as taking care of your unsecured debts over a 3 to 5 year period. Most commonly it helps you become current on your mortgage and helps stop a foreclosure, but it can also save a vehicle from repossession as well and is a great solution for repayment of back taxes. In a Chapter 13 Bankruptcy you could qualify for a mortgage modification and reduce your mortgage payment and possibly even get rid of your second mortgage all together.

Stop Foreclosure

No homeowner ever wants to receive notice of a foreclosure on their home, unfortunately homeowners fall into foreclosure every day. A Chapter 13 Bankruptcy can stop a foreclosure even after the Sheriff Sale is scheduled. The amount of money you are behind on your home, as known as arrearage, can be paid back over the 3 or 5 year period of your bankruptcy, which is a wonderful alternative to needing all the money right away to save your home.

Stripping Your Second Mortgage

Is the value of your home less than what you owe on your first mortgage alone? If the answer to this questions is yes, then a Chapter 13 Bankruptcy could eliminate your second mortgage. Since there is no equity in your house to cover any portion of the second mortgage, we can strip that mortgage and turn it into just another unsecured debt that will be wiped out after you complete your Chapter 13 Plan.

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