Yes. As long as the foreclosure hasn’t been completed, you can declare Chapter 13 in order to save your home even if you have received a foreclosure notice from your lender. However, if you are facing foreclosure it’s best to consult a Baltimore bankruptcy or an Ocean City bankruptcy attorney as soon as possible.
In a Chapter 13 bankruptcy, the foreclosure is “stayed” or placed on hold and all creditors must immediately stop contacting the debtor.
Chapter 13, and not a Chapter 7, is the bankruptcy filing that is most beneficial for homeowners who have equity in their house and want to keep their home. It allows debtors to get caught up on the overdue mortgage payments over the term of a three or five-year payment plan while continuing to make the regular, mortgage monthly payments.
A Chapter 13 is aimed at reorganizing a debtor’s finances into monthly payments that fit their budget. Past due amounts can be broken up into monthly payments that will allow the debtor to catch up on the mortgage and other debt obligations.
It’s important to note that debtors can lose their home if they fail to make the regular mortgage payments that come due after the Chapter 13 filing.
You shouldn’t feel ashamed about using Chapter 13 to save your home. The bankruptcy court has said on its website that “an individual may use a Chapter 13 proceeding to save their home from foreclosure.”
Although bankruptcy requires a lot of paperwork and information, if you are declaring bankruptcy on an emergency basis to stop a foreclosure, then your attorney will get the information needed to fill out only a few of the bankruptcy petitions – called a “barebones” or “skeleton” bankruptcy filing – and will let the court know that the rest of the documents will be filed at a later date.
However, debtors can lose their homes if the mortgage company completes the foreclosure sale before the paperwork is filed in court. So, if you’re facing foreclosure you should speak to an Ocean City or Baltimore bankruptcy attorney as soon as possible.
Another possible advantage of a Chapter 13 bankruptcy filing for those with secured debts such as a house or car is through what is called a “cramdown.” In some instances, a debtor can reduce the amount owed on a car loan to the depreciated value. In certain circumstances, debtors who own businesses who declare Chapter 13 can get a cramdown on amounts borrowed against the house to fund their business. A Baltimore or Ocean City bankruptcy attorney can provide more details.
The Law Office of Thomas J. Maronick is open during the pandemic and will continue to meet your Annapolis, Baltimore, Essex, Ocean City, Towson, White Marsh bankruptcy needs. A Baltimore bankruptcy attorney can help you to determine the best way to get out of debt, out from under creditor calls and how to keep as much of your property as possible. An Ocean City bankruptcy attorney can devise a strategy for you that allows you to use the bankruptcy laws to your advantage. The consultation is free.
We can meet with you remotely if you have access to Zoom. You can contact Thomas Maronick on his cellphone at 202.288.0167, the law office at 410-402-5571 or through the website for a free consultation.