Stopping Foreclosure with Bankruptcy?
“Can bankruptcy stop foreclosure?” This is a question that many debtors wish they had asked long before things got to the point of an auction sale happening the following day. If they had known that bankruptcy can stop foreclosure and provide a meaningful solution to catching up mortgage arrearages then they could have gotten started earlier and avoided much of the stress that keeps a person up at night. You might wonder what could be more important that saving a home from foreclosure, but there literally are a few things which rate much higher than your home. Some of these include health, family safety, and religion for most people. Because people are willing to sacrifice nearly anything to protect a family member or to get healthy again, the prospect of losing one’s home is bad, but not the worst thing that could happen to a person. Perspective about the importance of human life quickly comes into light when a person becomes seriously ill or is injured in a life threatening accident.
How Long Does the Bankruptcy Give to Catch Up Mortgage?
Chapter 13 bankruptcy allows for 3-5 years for repayment of the past due portion of mortgage payments. If a person has become seriously delinquent on mortgage payments to the tune of multiple thousands or even tens of thousands of dollars, then a bankruptcy over the maximum amount of time possible is usually the most desirable on the part of the debtor. For example, if a person owes $30,000 in mortgage arrears, then they would likely be looking at a trustee payment of $600/month for 5 years. On the other hand, if they chose a 3 year bankruptcy repayment plan then their payment would be closer to $1,000 or more per month. Both of these payments are large, but if a person can handle a $600 payment barely, then doing a 36 months (3 year bankruptcy,) would be unwise because there is a better option available.
Will I Have to Tell My Employer About my Chapter 13 Bankruptcy?
The other day, we had a client come to our office who had consulted with a trusted manager at work about the prospects of saving their home through chapter 13 bankruptcy. The wise friend told our client that the bankruptcy is much more common than he would think. He told our client that half of the people at their place of employment had probably filed bankruptcy at some point in time while working at the company. This may or may not be true but the sentiment is important to realize that an employer usually does not mind if a team member files for bankruptcy. They just want their employees to do the best job possible at work and if a bankruptcy gives them protection and keeps them in their home then the employer won’t likely mind. Additionally, the bankruptcy laws prohibit an employer from adversely affecting the job of the employee. Bankruptcy attorneys in Cedar Hill can often be sought to help with protecting a mortgage.
That all being said, the chances are high that your employer will have to be aware of the bankruptcy to some extent due to the fact that most chapter 13 trustees require a wage withholding form be completed and used to make the payments. This is sort of “set and forget” type of operation that many clients prefer because the bankruptcy payment becomes similar to other withholding items on a paycheck. Just like paying insurance or having taxes taken out, a trustee payment is easier to swallow when it is out of site and out of mind.