Chapter 13 may be your ticket to financial freedom.
Filing Chapter 13 Bankruptcy to stop a foreclosure is an effective way to re-organize your debt and allow you to get current with your mortgage lender. Chapter 13 allows you up to 60 months to get current with your home mortgage. For example, if you have mortgage arrears of $12,000. Your Chapter 13 payment for the mortgage arrears would be $500 a month. Unfortunately, what may occur is when you include the mortgage arrears along with your current mortgage payment, the Chapter 13 Bankruptcy plan payments may be too much to be feasible for your monthly budget.
Just recently, the Chapter 13 Bankruptcy Trustees have enacted a streamlined process to apply for a home loan modification while under Chapter 13 Bankruptcy protection. This program will assist in expediting the application process and if approved will allow you to get current with your mortgage and potentially exit bankruptcy sooner. During the loan modification process, you will not be required to pay toward your mortgage arrears, and in some cases, you can delay paying your current monthly mortgage payment, affording you time and resources to get ahead on your ongoing living expenses. A chapter 13 payment plan can be very flexible to meet your specific needs.
A traditional home loan modification process can take up to a year to be approved, but through the Chapter 13 Loan Modification program, approval can be obtained in as little as 45 days.
There are additional benefits in Chapter 13 besides saving your home. If you are behind on your auto loan payments or have a very high-interest rate. Chapter 13 can restructure your auto loan, reducing your interest rate, as well as, providing more time to pay off the vehicle loan. It doesn’t end there. Depending on your current financial situation, while saving your home and vehicle, you can wipe out your unsecured debts, like credit cards, medical bills, and signature loans, without having to pay them any money, if it is determined, you have no disposable income after paying your allowable living expenses.