The minute we file a Chapter 13 Bankruptcy Petition for you, an automatic stay stops the lender from completing a foreclosure sale on your home!
If you have an emergency situation that requires immediate help, please call our 24-hour hotline at (800) 551-7922. We will meet with you right away and explain your options face to face—in a free consultation. We can stop that foreclosure sale and get your financial life back on track.
Homeowners who want to use bankruptcy to save their homes from foreclosure will likely use Chapter 13 because it gives you options that you won’t find in Chapter 7. Many homeowners come to us after trying unsuccessfully to complete a loan modification or after frustrating experiences with their lenders.
Our bankruptcy lawyers have experience with San Diego loan modifications and the processes that lenders use to set up loan modifications. We can look at your situation and tell you whether you are likely to be successful in the loan modification process outside of Chapter 13 with your lender. We can also assess quickly whether you will be able to propose a viable Chapter 13 Plan that will also save your property and restructure your loan. These are options that you should consider with the help of an expert bankruptcy lawyer in San Diego.
But if your home or property are threatened with foreclosure, keep in mind that a Chapter 13 case will immediately stop your bank from foreclosing. This is because of the “automatic stay” in bankruptcy that acts like an injunction to stop all creditor collection activity, including foreclosures, repossessions, lawsuits, wage garnishments, collection phone calls and more. This is a critical way that Chapter 13 lets you take control of your finances again.
In addition to the automatic stay, Chapter 13 lets you file a “Plan” that restructures all of your debts (not just your mortgage). But the mortgage on your home or other property may be restructured to allow you to pay back the defaulted payments over a long period of time (3 to 5 years) while staying current on your regular monthly payments going forward. The defaulted amounts may be paid back interest free and if your Plan is “confirmed” by the Bankruptcy Court, the bank has no choice but to wait for these payments over the life of your Plan.
And Chapter 13 also offers some powerful tools that you may be able to use to clean up and take control of other aspects of your financial life including the liens on your property. For example, Chapter 13 allows you to “strip” certain liens from your property such as a second trust deed (or other “junior liens”) if your property is “underwater.” Your home is considered underwater if the amount of your secured loans (mortgages) is more than the value of your property.
So what happens to liens on your property that are “stripped” or removed? Well, these debts are then considered “unsecured” by any collateral, so they go into a “class” of debts that includes your credit cards, unpaid medical bills and other personal debts. In Chapter 13, these debts have the lowest “priority” and they are paid after
Chapter 13 can also be used to delay and modify payments for delinquent tax debts or student loans. You can even do a “cram down” on your car loan and potentially reduce the secured balance and extend the payments on a car loan. The point here is that many people come to us because of a foreclosure on their home, but they also face other debt problems that have plagued them for some time. Large credit card balances, medical bills, delinquent taxes or delinquent student loans, a delinquent car loan and so on. You will be pleased to know that you will be able to take control of all aspects of your financial life with a Chapter 13 Plan, not just a foreclosure.
And our bankruptcy attorneys have decades of experience dealing with Chapter 13 Plans and the Plan confirmation process. We know what works and we are expert at dealing with all aspects of a foreclosure, a failed loan modification and your options in Chapter 13.
In addition, you may find that once you have filed a Chapter 13 petition, your bank (home loan lender) may suddenly become much more flexible in offering you a loan modification. This is because your loan and financial information will likely be reviewed by a different department within the bank—a “bankruptcy department.” The bankers that work in these bankruptcy departments (sometimes they are lawyers and paralegals also) tend to be more sophisticated and often have levels of authority to modify loans that the “loan modification department” simply does not have. These individuals can access your bankruptcy information on file with the Court and you may be surprised at the results—especially after having a bank lose your loan modification application or documents more than once!
When you put all of this together, you can see that the process of saving your home from a foreclosure may turn out much different than you expected. You will have options in Chapter 13, and these options may lead to a much better payment plan or even a better loan modification than you were hoping for before you explored your options with us. The bottom line is that you need to take control of the process and stop the lender from foreclosing.
You can begin this process with a FREE consultation with the experts at the Bankruptcy Law Center by simply calling (800) 551-7922. We will meet with you quickly, analyze your situation and show you options. You deserve an expert San Diego bankruptcy lawyer who will give you the help you need when you need it most!