For a home on the brink of or in active foreclosure, the options to the homeowner(s) may seem limited. They can try a loan modification to save the home, but often they feel they have to ditch the home and move on. They try to do this through a short sale, deed in lieu of foreclosure, or perhaps even just abandoning the home altogether. Little do they know, however, that Chapter 13 offers perhaps the best solution to their problem.
In the Chapter 13, the arrears owed on the home are factored into the plan payments, meaning that once the bankruptcy is filed and subsequently approved, the mortgage is current and the foreclosure is stopped. This is predicated, of course, upon successful completion of the Chapter 13, but in all reality takes the anxiety and frustration over trying to catch up on delinquent mortgage payments out of the equation.
A Chapter 13 offers a faster, more streamlined option than a loan modification. Those loan modifications often take months to complete and put you on a trial period that can leave the homeowner feeling one step away from falling back into the foreclosure abyss. By filing a Chapter 13, you instantly get the mortgage relief you are seeking and at the same time don't extend the length of the loan like most loan modifications do. You pay back the arrears through the plan while at the same time making your regular mortgage payments. Furthermore, you can always continue to work on loan modification to lower the mortgage payment and simply seek court permission for the loan modification in the Chapter 13.
Trouble with mortgage payments is, unfortunately, a common story in today's tumultuous economic climate. Seeking out an experienced bankruptcy attorney can help solve those problems and keep your home.
