Chapter 13 bankruptcy can stop a foreclosure and allow you to save your home by giving you the opportunity to catch up on mortgage payments over a three, to five-year period. For example, say you are $10,000 behind on your mortgage and you have a regular monthly mortgage payment of $900/month. If you are facing foreclosure, the bank often will require you to pay the full $10,000 in "arrears" in order to bring your loan current (which, very likely, is not a possibility).
In a chapter 13 bankruptcy case, you will continue to pay your regular mortgage payment each month (the $900/month). However, each month of your three, to five-year plan, you will also pay a small part of the $10,000 in arrears that you owe. Therefore, if you maintain your chapter 13 plan payments, once your chapter 13 case is completed, you will have paid your new mortgage payments as they have become due and you will also have paid off the $10,000 in arrears that were owed at the time of filing.
In North Carolina, foreclosure sales do not become final until the expiration of a 10-day upset bid period following a foreclosure sale. Therefore, if you file a chapter 13 case before the expiration of the 10-day upset bid period, you will have the opportunity to save your home in your chapter 13 case. However, preparing bankruptcy cases takes time and it is always recommended to see an attorney well before facing an imminent deadline. There are many other benefits that chapter 13 may offer and to learn more, please visit my Bankruptcy Resources page.
*The content on this website is not, nor is it intended to, be legal advice. In order to obtain legal advice regarding your specific situation, you are encouraged to contact an attorney.