Foreclosure Assistance Colorado Springs
Filing Chapter 7 or 13 can postpone foreclosure proceedings. If you are about to be foreclosed on your home, filing Chapter 7 or 13 may be something for you to consider. We have handled many emergency Chapter 7 and 13 filings to help clients avoid foreclosure.
In many cases, filing Chapter 7 bankruptcy can delay the foreclosure by a number of months. Some people may be able to save their home by filing for Chapter 13 bankruptcy.
Delaying Foreclosure: The Automatic Stay
When you file either a Chapter 13 or Chapter 7 bankruptcy, the court automatically issues an order (called the Order for Relief) that includes a wonderful thing known as the “automatic stay.” The automatic stay directs your creditors to cease their collection activities immediately, no excuses. If your home is scheduled for a foreclosure sale, the sale will be legally postponed while the bankruptcy is pending–typically for three to four months. However, there are two exceptions to this general rule:
Many people will do whatever they can to stay in their home for the indefinite future. If that describes you, and you’re behind on your mortgage payments with no feasible way to get current, the only way to keep your home is to file a Chapter 13 bankruptcy.
How Chapter 13 Bankruptcy Can Help
Chapter 13 bankruptcy lets you pay off the “arrearage” (late, unpaid payments) over the length of a repayment plan you propose–five years in some cases. But you’ll need enough income to at least meet your current mortgage payment at the same time you’re paying off the arrearage. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home.
2nd and 3rd mortgage payments. Chapter 13 may also help you eliminate the payments on your second or third mortgage. That’s because, if your first mortgage is secured by the entire value of your home (which is possible if the home has dropped in value), you may no longer have any equity with which to secure the later mortgages. That allows the Chapter 13 court to “strip off” the second and third mortgages and recategorize them as unsecured debt –which, under Chapter 13, takes last priority and often does not have to be paid back at all. For more information on Chapter 13 bankruptcy, see the Chapter 13 Bankruptcy area of our website.
Please call us today at 719-636-0001 if you considering taking these steps to postpone a foreclosure.
