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Thursday, March 19, 2020

Halting Your Foreclosure with Chapter 13 Bankruptcy

How can I delay or stop the bank from foreclosing on my home by filing for bankruptcy?

If you have fallen behind on your mortgage payments, you may be at-risk of losing your home through foreclosure. Each year, one in every 200 homes are foreclosed on, according to the Mortgage Bankers Association. Foreclosure can be a daunting prospect and those facing it may be desperately looking for a way to halt the process. Bankruptcy is one such option. Filing for either Chapter 7 or Chapter 13 bankruptcy can put a temporary halt to the process, while Chapter 13 bankruptcy may even allow you to save your home permanently. Our Beavercreek, Ohio Chapter 13 bankruptcy lawyers discuss your options for potentially saving your home from foreclosure through Chapter 13 bankruptcy.

The Automatic Stay Provision

When you file for either Chapter 7 or Chapter 13 bankruptcy, all foreclosure proceedings must immediately stop. The filing in effect acts as a pause button on the foreclosure process by issuing an automatic stay. The stay generally allows the homeowner to have a little breathing room from the bank’s attempts to repossess the home.

In a Chapter 7 bankruptcy, the debtor’s assets will be sold in order to pay back creditors. Your house is likely to be included in the sale. While filing for Chapter 7 might allow you to remain in the home until the conclusion of the bankruptcy period, it is unlikely to allow you to save your home in the long run.

Chapter 13 Repayment Plan

Chapter 13 bankruptcy is known as the reorganization chapter or wage earner’s plan. Chapter 13 bankruptcy allows those with a steady income to develop a repayment plan to repay their creditors, without the need to sell their assets as in a Chapter 7 action. With a Chapter 13 bankruptcy, you will develop a repayment plan that will last between three to five years. Your missed mortgage payments can be included within the plan so that you become current on the mortgage.

It is critical that you remain current with your repayment plan. Further, you will still need to stay up-to-date on your current mortgage payments in order to keep your home. Upon successful completion of your repayment plan, you will receive the discharge of your debts included within the plan.

Chapter 13 is not right for everyone and will require significant commitment on the part of the filer to complete repayment. For some people, however, Chapter 13 offers the financial relief they need to move forward while keeping their home. Contact a bankruptcy lawyer for more assistance with your potential Chapter 13 plan.


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Miami Valley Bankruptcy, Brian Lusardi, Esq., assists clients with Bankruptcy matters including but not limited to: Common Myths, Cost of Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, The New Bankruptcy Law and Personal Bankruptcy in Xenia, Ohio, and the cities of: Wilberforce, Alpha, Spring Valley, Dayton, Bellbrook, Yellow Springs, Cedarville, Fairborn and Clifton; and the counties of Greene and Montgomery.



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