How Can Chapter 13 Help with a California Foreclosure?
Nearly 1.1 million individuals and businesses filed bankruptcy petitions between June 2012 and June 2013. This marks the lowest number of bankruptcy filings in any 12-month period since 2008. Likewise, foreclosure activity across the nation is declining, but has not yet returned to the 2006 pre-housing bust. California foreclosure activity placed below the top 10 highest states for the sixth consecutive month. Nevertheless, banks are still threatening to foreclosure on thousands of California homeowners. You can save your home by filing Chapter 13 bankruptcy.
The Automatic Stay halts the foreclosure process
Immediately upon filing your Chapter 13 bankruptcy petition, the automatic stay forbids creditors from continuing any collection activity, including foreclosure. The automatic stay can postpone a foreclosure sale while your bankruptcy is pending — usually up to four months. The bankruptcy rules provide for exceptions that abbreviate the time period for automatic stay protection. Lenders may file a motion to lift the automatic stay which allows them to proceed with the foreclosure sale. As the basis for lifting the stay, lenders may argue you filed bankruptcy after you received the three month notice of default. The lender could proceed to obtain court permission to continue with the sale at the end of the notice period
The repayment plan helps you make up missed payments
Chapter 13 affords you a chance to cure your mortgage default while protecting your home from a foreclosure sale. The repayment plan can be designed to last up to five years to make each monthly payment affordable for you. Your payments may include any arrears that have piled up and your current mortgage payments. Quite often obligations to a second or third mortgage can be stripped off and converted to an unsecured debt. Under Chapter 13, unsecured debts are treated with low priority therefore you pay a small amount or the debt is discharged. At the conclusion of your Chapter 13 bankruptcy case, you gain control over your finances and financial fresh start without losing your home.
If your home is danger of foreclosure, a Los Angeles Chapter 13 foreclosure prevention attorney can help secure your rights and your home. Contact the Law Offices of Michael Jay Berger for a free consultation.