Will filing for a Chapter 13 stop foreclosure?
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Will filing for a Chapter 13 stop foreclosure?
House is being foreclosed on in about 10 days.
Asked on June 23, 2012 under Bankruptcy Law, Texas
Answers:
John Turco
Answered 12 years ago | Contributor
This is John Turco, a bankruptcy attorney in Omaha, Nebraska, and my website is found at: www.johnturcolaw.com. The short answer to your question is YES, a Chapter 13 can certainly stop a foreclosure sale. Of course, there are always very specific details that need to be considered.
First, does it make practical sense to stop the sale? Can your afford the house going forward by making the future mortgage payments on time? Similarly, is the house worth saving? So, this is where we start our analysis. Assuming that the answers to these type of questions are yes....we proceed further.
Second, a Chapter 13 entails making a monthly payment (in addition to your mortgage) to the Chapter 13 Trustee for typically three (3) to five (5) years. The amount of that payment depends on a lot of factors such as a) the amount of back payments on the house, b) your income, c) back child support or taxes, if any, c) the value of your assets that have equity in them and d) vehicles that you may owe money on that you want to keep. There are, of course other factors that may come into play but that requires a personal consultation to determine.
Third, whether or not you have file a bankruptcy in the last 8 years or so may have some impact on stopping a foreclosure sale. As can been seen, there are just a whole lot of issues that we normally ask our clients to quickly determine the qualification status and ultimately, whether or not a Chapter 13 is a good idea or not for them.
Finally, if you are faced with a foreclosure sale, it is absolutely URGENT that you see an experienced bankruptcy attorney as soon as possible. There are requirements to filing that cannot be done at the last minute. For example, you are required to take a credit counseling course prior to even qualifying to file. This course must be fully completed at least one day before filing a case. There are also some other basic but CRITICAL things you must do.
John T. Turco & Associates, P.C., L.L.O. will be able to quickly guide you to making the right decision.
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