Bankruptcy Lawyer Bryan W. Stone answers the question: “What is Chapter 13 bankruptcy?”
Do not panic just because you receive a foreclosure notice. This does not mean the bank can take your house tomorrow. Most people will do whatever it takes to save their home. Depending on how far behind a homeowner falls in mortgage payments, foreclosure can be a scary process. Negotiating with the bank only works if you have money to restructure payments or modify your loan completely. However, if working out a plan like this is not an option, eventually the lender will move your account to a foreclosure status and proceed with the repossession of your home through a legal sale. Understanding your options during the foreclosure process requires the help of a skilled attorney. A Chapter 13 bankruptcy filing provides legal protection that can be leveraged in such situations.
When a court grants your lender express authority to sell your home in a foreclosure sale, filing a Chapter 13 bankruptcy petition will stop the clock. Chapter 13 bankruptcy allows you to keep your home if you are facing a foreclosure sale. All legal action stops once an attorney has filed a Chapter 13 bankruptcy petition for you. It is a powerful tool designed to help creditors restructure delinquent debt over time.
How Chapter 13 Bankruptcy Works
Within 15 days after filing a Chapter 13 bankruptcy petition, a homeowner must file a proposed plan to repay the mortgage loan over a three to five-year period. The plan must set forth income, expenses, and proposed payments to the trustee to cure delinquency with the mortgage lender.
Homeowners must make all mortgage payments in a timely manner under the terms of the bankruptcy repayment plan. If all payments are made on time, the homeowner will catch up the past due delinquency over three to five years or may qualify to refinance the loan after a specified period of repayment. Failure to make payments on time will result in the court lifting the automatic stay placed on foreclosure sale proceedings.
Most people think that all debts secured by property must be paid back over the duration of your Chapter 13 plan. In some cases, mortgage lenders receive little if any distribution in a Chapter 13 bankruptcy settlement. If a lender does not file a proof of claim, no payments are distributed, and the debt is generally discharged upon the completion of the Chapter 13 plan.
A skilled Charlotte bankruptcy attorney will help you understand and navigate what may feel like an overwhelming process. You should hire a seasoned professional to help you make the right strategic moves to save the biggest investment of your life – your home.
Contact a Knowledgeable Bankruptcy Attorney in North Carolina to Save Your Home
The Charlotte bankruptcy attorneys of Arnold & Smith, PLLC, have changed the lives of thousands of families by helping them save their homes. If you are looking for a fresh start, contact us right away. We want to guide you through the bankruptcy process so that you can begin toward a better financial future. If you are contemplating bankruptcy in the Mecklenburg County, Iredell County or Union County area, please call the skilled lawyers at Arnold & Smith, PLLC at 704-370-2828 or find additional resources here.
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