Keeping Your HomeThe Chapter 13 in bankruptcy allows homeowners to prevent or delay foreclosure while paying off their debts. It is a good option for homeowners who have fallen behind on their payments. It is also referred to as personal reorganization under bankruptcy. Through this the debtor is allowed to propose a plan for repayment. Then, the debtor is expected to make payments on a monthly basis to a trustee who will in turn pay the creditors. The repayment plan will holds the details of the debts and the amounts that will be paid out to these debts every month. Priority debts and mortgage arrears are given the foremost importance in the repayment plan. Priority debts include alimony, child support and some taxes. Non-priority debts that are unsecured include medical bills and credit card debts.
See also: Florida Bankruptcy Exemptions
Filing a Chapter 13 Bankruptcy
With Chapter 13 bankruptcy, homeowners can pay a part or whole of their debts over a particular duration as per a preset repayment plan. The Chapter 13 allows you to pay off mortgage arrearage through the repayment plan's duration. This could be about three to five years and depends on the wages and time it takes to follow the requirements of the plan. For this to work out financially, your income will have to at least suffice the mortgage payments and expenses from other basic needs, while you're paying for mortgage arrears. If you make payments accordingly till the repayment plan ends, you can avoid foreclosure while keeping your home.
At the end of chapter 13 bankruptcy, mortgage arrears and priority debts are paid off. Unsecured creditors will receive a part of the debts. The amount received by them depends on what percentage has been specified in the plan and the remaining amount, if any, is discharged.
Saving Your Home
Any individuals with a sufficient amount of income who can show that they can afford to make payments in accordance to the plan can file a Chapter 13 bankruptcy. Then again, individuals who have a large amount of debt on their hands may not be eligible for the same, despite having a decent income.
Homeowners should include personal loan, credit card, student and car loan debts when they file, and be completely honest about all their debts. Else, it can put your legal bankruptcy protection under jeopardy. It is essential that you keep the monthly payment amounts to a low value. While it may require for you to agree to five-year plan, you have a good chance of keeping your home with this strategy. When you have a low monthly payment, it becomes easy to demonstrate that you are able to make these payments in the court. This increases your chances of being granted the Chapter 13 bankruptcy, in turn letting you keep your home. Once you have completed you payments through the plan for the specified duration, you would have reimbursed the money to the loan and mortgage financing companies. You can then begin a new financial life without debts.
If you have any questions about keeping your home in bankruptcy or would like to speak to us about your options, please contact us at (813) 518-7411. We represent clients during stressful and difficult times in their lives. We are empathetic, responsive, and push for a quick resolution. We look forward to helping you resolve your issue quickly, fairly, and in a way that will help you to return to the stable, predictable life that you deserve.