When filing a Chapter 13 bankruptcy, a debtor will not lose any property (including your home) to the bankruptcy trustee. The filing also does not affect a debtor’s mortgage. So while a debtor will not lose their home as the result of filing Chapter 13, they can still lose their home through foreclosure. A phoenix chapter 13 bankruptcy lawyer will be able to walk you through the process.
Chapter 13 and Keeping Your Property
While a debtor will not lose their home as the result of filing Chapter 13, they can still lose their home through foreclosure. The automatic stay that is issued when a debtor files bankruptcy will stop any impending foreclosure. And if a debtor is able to make his or her mortgage payments during the Chapter 13 repayment period, they will be able to keep their home.
In most Chapter 13 bankruptcies, a debtor will pay the mortgage lender directly. But in some cases, a bankruptcy court and trust will require a debtor to make mortgage payments through the Chapter 13 repayment plan. A trustee will then pay the mortgage lender with this money. If it’s available for your situation, it’s better for a lender to be paid outside of the repayment plan because a trustee’s fee is based on a percentage of the repayment payment. This means the higher the amount that goes through the repayment plan, the more fees will be tacked on.
To keep their home, a debtor will need to pay back all mortgage arrears by the end of the repayment period. This period usually lasts three to five years.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 13 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008