How does Chapter 13 help save a home from foreclosure? If someone is facing foreclosure or maybe even facing a Sherriff’s Sale date, Chapter 13 will stop that foreclosure case or Sheriff’s Sale date right in its tracks. You can file Chapter 13 bankruptcy through a Bannockburn bankruptcy lawyer or other lawyer in your local area.
Let me give you a typical scenario of someone who’s facing foreclosure. The person might have lost income due to a job loss, illness, injury, divorce or other type of situation which caused them to not be able to make their mortgage payment on time. After three or four months of not making a mortgage payment on time the mortgage company turns the case over to their attorneys to file a foreclosure action. This is the first time that someone should seek bankruptcy advice.
Let’s say at this point the homeowner now has the ability to start making the regular mortgage payment again. Unfortunately the mortgage company typically wants one lump-sum payment to get caught up. Well, the debtor doesn’t have the ability to make one lump-sum payment but he does have the ability to repay the mortgage arrears over the next three to five years. He very likely became employed once again or whatever illness he had has been cured or whatever financial situation that caused him to fall behind in the first place has been rectified.
By filing a bankruptcy Chapter 13 case, the mortgage company must accept the regularly scheduled monthly payment once again on time and accept a partial payment which is paid by a Chapter 13 trustee. The amount of the arrearage can be repaid over three to five year period so it really gives the homeowner a long time to catch up on the mortgage arrearage. The debtor also has to make the regular mortgage payment outside of the bankruptcy going forward each month. Once receipt of the bankruptcy filing is accepted by the court the mortgage company will receive a notice in the mail from the Clerk of the United States Bankruptcy Court. The bankruptcy notice will basically state that the case was filed under Chapter 13 bankruptcy with a specific date, case number, trustee, debtor and debtor’s attorney. From that date forward the debtor is responsible for making the current mortgage payment on time once again.
If you should have further questions or concerns about your particular situation, you should seek an appointment with a skilled, experienced Chapter 13 attorney in your area. You should be able to find several attorneys who specialize or concentrate in Illinois bankruptcy law.