Like many in Tennessee who are dealing with financial challenges, you may have considered filing for bankruptcy. However, the possibility of losing your home may have stopped you from taking this step. We are often asked at Rothschild & Ausbrooks, PLLC, what options you have for saving your home. In this post, we will explain how filing for Chapter 13 bankruptcy may allow you to keep your property.
In addition to your other debts, you may have fallen behind on your mortgage payments. If this is the case, then your lender may have started foreclosing on your home. The U.S. Courts points out that filing for Chapter 13 bankruptcy will stop foreclosure proceedings. After you have declared Chapter 13 bankruptcy, an automatic stay will be triggered, stopping collection actions against you. Then, you may include any arrearages in your debt repayment plan. Simply filing for bankruptcy and including your owed amount in your repayment plan will not, however, relieve you of your mortgage obligation. In order to save your home, you must make your regularly scheduled mortgage payments for the duration of your Chapter 13 repayment plan.
In some cases, your first mortgage may be secured by your home’s entire value. As such, you may not have any remaining equity to secure a second or third mortgage. Depending on the circumstances, the court may choose to re-categorize these loans as unsecured debts. Chapter 13 repayment plans typically address secured debts. Often, unsecured debts are not paid back in full.
For more information about achieving a fresh financial start while protecting your property, please visit our Chapter 13 bankruptcy page.