Bankruptcy Protection for a Past Due Mortgage

You can file for bankruptcy and avail protection for a past due mortgage. You can also use bankruptcy to prevent foreclosure. You can catch up catch up on past due mortgage payments with Chapter 13 bankruptcy. Also you can even stop a foreclosure with Chapter 13 bankruptcy.

Automatic Stay

When you file for bankruptcy, an automatic stay comes into operation by law. This automatic stays prevents your creditors from contacting you or taking steps to collect the debts. This automatic stay stops foreclosure and other steps initiated by your creditors.

Chapter 13

Chapter 13 offers an opportunity to save your home from foreclosure. If you are about to loose your home in foreclosure, you should seriously consider filing a bankruptcy petition. The automatic stay stops foreclosure and allow you time to regroup and try to work out a plan to keep the home. You can to permanently stop a foreclosure with Chapter 13 bankruptcy.  If you make payments according to the Chapter 13 plan and include your mortgage debt in the plan, you should be able to permanently stop foreclosure. A Chapter 7 bankruptcy will temporarily delay foreclosure while the U.S. Bankruptcy Court works out the details. It can buy you 45 to 75 days.

Payment Plan

A Chapter 13 bankruptcy will reorganize your debt and creates a payment plan. It helps regularize past defaults and make future payments. You can catch up on past due mortgage with Chapter 13 by including the mortgage payments in your payment plan. You can cure delinquent mortgage payments over time. Nevertheless, you must still make all mortgage payments that come due during the Chapter 13 plan on time.

Pay Fraction of Second Mortgage

You can strip a second mortgage with bankruptcy. A second mortgage that is completely unsecured can be stripped in Chapter 13. If such a second mortgage is stripped, it can be treated as an unsecured debt in the plan and paid a fraction over 5 years, just like credit cards.

How to Start

If you have defaulted on your mortgage payments or are facing foreclosure, you must consult an experienced bankruptcy attorney. Do not wait until it is too late. By using the services of an experienced bankruptcy attorney, you can catch up on past due mortgage payments and prevent foreclosure. Despite its drawbacks, potential pitfalls, and legal complexity, filing bankruptcy will let you avoid foreclosure and work out a long-term solution to keep your home. Chapter 13 bankruptcy is a legal way of catching up with past due mortgage payments and preventing foreclosure. Also you can strip a second mortgage with bankruptcy.