I have many clients that come into the office and want to keep their home. They are behind on payments and facing foreclosure. Most may be “under water” on the home, meaning the value of the home is substantially less than the amount they owe to the bank. They may be months behind on the mortgage payment for many reasons. Some due to unemployment, others its medical expenses or even an adjustment to the monthly payment they did not anticipate often due to the interest only period on the loan coming to an end.
Can you make regular monthly payment?
Whatever the reason they are behind, as they sit across the desk from me and ask how they can keep their home, my first question generally is whether or not they can make the regular ongoing payment. Many of these people want to do all that they can to save their home. Although we discuss negative equity and market forces and how long it will take for them to recoup the loan to value amounts they want to keep their home. No amount of persuasion on my part to move them forward to a brighter financial future with as broad of a fresh start as bankruptcy can provide will move them out of the house. That is a decision each client must make for themselves and I try to assist them in accomplishing their goals even though I might disagree.
If they can make the regular ongoing payment, since bankruptcy law prohibits modification of a mortgage on a primary residence, I next ask could they bring the past due amounts or arrearage including all late fees, collection and foreclosure costs current over a time if we broke it up into monthly payments. They are usually a bit less sure about this but want to try.
We discuss how to accomplish this goal via
Chapter 13 bankruptcy proceedings. We look at their budget, look at what debts will be discharged under bankruptcy, whether or not
we can get rid of the second mortgage, how much equity they have in all property both real and personal above exemption amounts and how to make certain debts like car payments more affordable by forcing a restructure of the debt on the bank (reducing interest, re-amortizing the loan, “cramming down” the principal).
If they can make it work through a chapter 13 plan and it gets them current and debt free except for the remaining balance of the mortgage we do it.
Only an experience bankruptcy attorney can tell you what your options are and how to accomplish your goals of saving your home and stopping foreclosure.
Contact one today!
