Chapter 13 Bankruptcy and impact on your Foreclosure

If you are facing foreclosure, filing a Chapter 13 bankruptcy can help. To begin, it will allow you to make up mortgage arrears through your Chapter 13 bankruptcy plan (something you cannot do in Chapter 7 bankruptcy). Additionally, you can remove second mortgages, when applicable.

Filing Chapter 13 Bankruptcy may be an option to help save your home. If you are in foreclosure, the automatic stay provided by the bankruptcy proceeding provides a temporary stop to the foreclosure process. Through your Chapter 13 bankruptcy plan, you can make up the arrears owed to your mortgage company, while making current mortgage payments. If you are able to do so, the lender will not continue with the foreclosure process.

Another benefit of filing a Chapter 13 Bankruptcy is the ability to remove any second mortgages or home equity lines of credit that are no longer secured by the equity of your home. Stripping off the second mortgages/home equity lines of credit will then become part of your unsecured debt, which will be paid off (at a much lower rate) through the Chapter 13 bankruptcy plan. Once the Chapter 13 bankruptcy plan is complete (which takes anywhere from 3 to 5 years), any unpaid loan amounts will be stripped off the mortgage and automatically discharged through the bankruptcy process.

For homeowners who cannot afford to pay a Chapter 13 bankruptcy plan, they have the option to file a Chapter 7 bankruptcy. This process too, can provide you with the necessary relief, when facing foreclosure.

If you have questions regarding which option would be best for you, please feel free to call the Law Office of Ray Garcia, P.A., at 305-227-4030 for a free consultation.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.raygarcialaw.com