Few things are more distressing than foreclosure. Fortunately, Chapter 13 bankruptcy provides a reliable way to protect your home.
From the very day one files bankruptcy, that person comes under the protection of the “automatic stay.” The automatic stay is an injunction—a judicial decree—barring all of one’s creditors from performing any further collection activity. It prevents any company you owe money to—any credit card company, hospital, personal loan company, or, yes, mortgage company—from billing you, suing you, contacting you, garnishing your wages, or proceeding with a foreclosure. The phone goes quiet. The mailbox goes empty. Garnishments are stopped. And any lawsuits pending against you are halted, including foreclosure proceedings.
The stay remains in place until the day one receives a bankruptcy discharge–the court order forgiving their prebankruptcy debts. In a Chapter 13 case, it takes 36-to-60 months for the Court to enter that order. Consequently, Chapter 13 affords you up to 60 months to get caught back up on your mortgage. In essence, the stay freezes the mortgage lender from pursuing further foreclosure proceedings, providing the homeowner up to 60 months to pay off their arrearages. Therefore, by the time you complete your Chapter 13 plan, not only will you be free of unsecured debts like credit card bills, but you’ll be current on your home as well, with foreclosure out of sight and out of mind.
Homeowners in the Oklahoma City metro area file Chapter 13 to protect their homes all the time. It’s a sound and reliable strategy. Give us a call or fill out our contact form if you’d like to discuss how to save your home.