Chapter 13 and Foreclosure

Chapter 13 bankruptcy offers unique advantages that other types of arrangements can’t provide when it comes to California foreclosure options. Chapter 13 bankruptcy may be the ideal solution if you have many other debts which are taking up a significant amount of your paycheck. The Chapter 13 bankruptcy process allows for the modification of many types of debt, including some second and third mortgage debts, which can help you to remain in your home. Additionally, Chapter 13 bankruptcy allows you to make payment arrangements for debts that cannot be discharged, such as student loans and tax debt.

Filing for Chapter 13 bankruptcy will put a stop to the foreclosure process. Often, this will give you the opportunity to work with your mortgage lender and make payment arrangements that will satisfy what you currently owe, as well as create a sustainable payment option moving forward. If you cannot negotiate with the lender, you may still be able to prevent foreclosure – often, arrears payments are spread out over the course of the Chapter 13 repayment plan, allowing you to catch up with your mortgage, get current, and remain in your home.

If you have other, unsecured debts which comprise a considerable portion of your expenses, Chapter 13 bankruptcy can reduce or eliminate these payments altogether. Non-priority unsecured debts such as a second mortgage when there is no equity in the home can be removed, lowering your mortgage payment dramatically. And because you only have to repay your creditors to the extend that they would be repaid under a Chapter 7 bankruptcy, for some people, credit card debts may not have to be fully repaid, if they are repaid at all. This reallocation of debt and the amounts you owe may be enough in some cases to keep you out of foreclosure.

If you are facing foreclosure on your California home, there are solutions available, but only if you take action sooner, rather than later. The longer you wait, the more difficult it becomes to resolve the issue of unpaid mortgage payments. If you are considering filing for Chapter 13 bankruptcy to halt a pending foreclosure proceeding, you need to speak with a professional California Bankruptcy Attorney about your case as soon as possible. Our firm can provide you with a free initial case evaluation that will give you the information you need about foreclosure and Chapter 13 bankruptcy, and how it can help your particular circumstances. Contact us today and put our expertise to work for you – remember, the sooner you have reliable, reputable legal counsel, the better your chances to avoid a potential foreclosure.