Filing for Chapter 13 bankruptcy protection provides an automatic stay against your creditors. Once they receive notice you filed for bankruptcy, they must stop all collection proceedings against you, including foreclosing on your home. Then it’s up to you and the court to come up with a repayment plan under Chapter 13. The bankruptcy attorneys at Groce & DeArmon, P.C., explain how you can afford your home mortgage under bankruptcy protection.
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Lower Debt Loads Based on Collateral
One way to afford to make your mortgage payments in a Chapter 13 bankruptcy protection payment plan is to ask the court to reduce the debt loads based on collateral.
For example, you purchased your car for $20,000 two years ago. You still owe $12,000 on it, but the vehicle is now worth $8,000. You could petition the court to reduce the debt on your car to $8,000, or what it’s currently worth. Lower debts and lower payments create a lower amount to pay each month during your repayment plan, thereby allowing you for more flexibility when it comes to paying your mortgage.
Pay a Fraction of Unsecured Debts
Some unsecured debts can make payment arrangements with you when you’re under bankruptcy protection. Negotiate with your lenders to make these payments and the payoff amount as low as possible. You could very well pay off a large portion of your unsecured debts before you come out of the Chapter 13 bankruptcy payment plan. Freeing yourself of these debts makes mortgage payments more manageable.
Get Rid of Fees
Your mortgage company keeps track of the arrears you owe when you couldn’t make payments, including any fees for late or delinquent payments. You may petition the court to waive any fees imposed by your mortgage company. It also helps if you talk to your mortgage company and negotiate with them. They could lower the amount of money you owe for arrears when you’re under Chapter 13 bankruptcy protection.
Remember One Thing
Filing for Chapter 13 bankruptcy protection is scary. However, you need to remember that your creditors want you to make payments. You can negotiate with them ahead of making a payment plan.
Many creditors will be satisfied with reduced mortgage payments if you are in bankruptcy protection. This is because it is more profitable for the lender to accept reduced payments rather than trying to foreclose and sell your home. An experienced Chapter 13 bankruptcy attorney may be able to help you negotiate reduced mortgage payments so you can stay in your home.
Call Groce & DeArmon P.C. About Chapter 13 Bankruptcy Protection
Have questions about affording your mortgage payments during Chapter 13 bankruptcy protection? Groce & DeArmon has answers. Contact Groce & DeArmon, P.C., or call toll-free 1-800-640-3706 in Missouri or 417-862-3706 for more details or a free consultation.