San Diego Bankruptcy Lawyer | Can I Save My House?
I am heading into foreclosure! Can I save my house?
This is not an easy question to answer without knowing a lot more and it also depends on your unique circumstances. If you are many months behind in payments, you should probably consider Chapter 13. While you cannot generally force your lender to change or modify the mortgage payments on your principal residence, in Chapter 13 you may be given additional time to get caught up on missed payments. This means that you will be required to start keeping up your regular monthly mortgage payments once your bankruptcy case is filed. In addition you will be required to and make an additional payment to a court appointed bankruptcy trustee each month in order to start getting caught up on the arrears. This additional payment is know as an adequate protection payment. The bankruptcy court may give you up to five years to get caught up. Also, in a Chapter 13 under certain circumstances you may also be able to eliminate a payment to a junior lien-holder as in a second or third mortgage. In order to eliminate or strip the lien you will need to be able to prove that the house was worth less money on the day you filed for bankruptcy then what you owed to the senior lien-holder. This will require a separate proceeding be brought in your bankruptcy case to value the residence and determine the status of the junior lien-holders. In addition, sometimes a Chapter 13 can forestall an imminent foreclosure sale providing additional time for a lender to consider a loan modification. Keep in mind the lenders decision to make a loan modification in large part is discretionary. If you know you absolutely cannot afford your future mortgage payments mortgage Chapter 7 might be the better option.
