There are many advantages to filing a Chapter 13 bankruptcy if you own a home. There are ways to protect your home, stop foreclosures, remove liens and catch up back payments. These advantages often make Chapter 13 the better option over filing a Chapter 7 when you own your home.
- If you are behind on your mortgage payments you may be able to file a Chapter 13 bankruptcy and take up to 60 months to catch up the back payments.
- Filing Chapter 13 stops any foreclosure so long as the property has not yet been sold. You have until the morning of the sheriff sale to get your case filed and stop the sale (although we do not advise waiting this long).
- You can catch up your past due real estate taxes in a Chapter 13.
- You may be able to strip and remove any liens and judgments filed on your property by creditors.
- Under the right circumstances you may be able to strip or remove the second mortgage from your home and treat it an unsecured creditor.
- Under the right circumstances you may be able to change the terms of your current mortgage. This generally only applies to second mortgages or equity loans. You may also be able to change the interest rate.
- You can still work out a modification on your mortgage if you are in a Chapter 13.
- You can always surrender and give back your home to the mortgage company and end your responsibility on the debt.
These are just some of the advantages to filing a Chapter 13 bankruptcy to protect your home. Chapter 13 bankruptcies are complex so it is very important to talk to an experienced bankruptcy attorney who has filed many Chapter 13s on behalf of his/her clients.