If you are facing foreclosure on your home, it is important to understand the basics of the process and your options.
When will I be notified of a foreclosure?
The financial institution foreclosing on your home must mail a notice to you before they list your home for sale. The mortgage lender can either publish a notice of the sale in a newspaper at a minimum of 20 days prior to the day the property is available for sale or the lender can post notices in multiple public places 30 days before the property is put on the market.
What if I have a high-cost mortgage?
If there is a high-cost home loan attached to the property, then the lender is required to send you notice 30 days before a notice of foreclosure is published. You will have the opportunity to bring your payments up to date and avoid default until three days prior to the sale of the property.
What is Chapter 13 bankruptcy?
Filing Chapter 13 bankruptcy is an option for those who would like to keep their assets and can repay their lenders.
This is an option if you are facing foreclosure and need to have your debt restricted in order to pay your mortgage lender.
How long will I have to repay my debts?
Filing for Chapter 13 will require you to participate in a court-approved repayment plan that can last between three to five years.
If your payments are all made on time, then at the end of the payment plan, the court can discharge any unsecure debt that remains.
What else is required by the court if I file Chapter 13?
The court will require you to complete a trustee approved credit counseling and financial management program.
Am I eligible to file?
In order to be considered for Chapter 13 bankruptcy, you must be employed or have a source of reliable income. You must also have enough income to cover your living expenses once your creditors are paid each month. Also, you must have less than $336,900 in unsecured debts and less than $1,010,650 in secured debts.
If you are in danger of a foreclosure and are considering filing Chapter 13, contact an attorney with bankruptcy experience.