Chapter 13 Bankruptcy
The threat of losing your home can be devastating. With the current state of the economy, many people have fallen behind with their mortgage payments. If you are not current with your mortgage payments, your lender may initiate foreclosure proceeding on your home. (see my blog to learn more). You may not even realize that your home is in foreclosure until you receive notice or you see an advertisement in your local newspaper that your home is going to be sold at a foreclosure sale.
A Chapter 13 bankruptcy immediately stops the foreclosure or sale of your home and allows you to repay the mortgage default gradually over a 3-5 period. It also stops the accruing interest and fees on the mortgage arrears. Many clients who file Chapter 13 also apply for a loan modification to reduce their current monthly mortgage payment while saving their home in a Chapter 13.
Eliminate Second Home Mortgage
With foreclosure rates increasing, many homeowners have lost a significant amount of equity in their homes. Homeowners are finding that they owe more to their mortgage lender than what the property is worth, also referred to as being “underwater”. This is especially true for homeowners who have two mortgages on their property. In addition, many homeowners are having a difficult time making two mortgage payments because their mortgage payments have increased or their income has decreased. If you are struggling to make your mortgage payments or have fallen behind in your debt, Chapter 13 Bankruptcy may be your solution.
Chapter 13 allows you to “strip” the second mortgage when the value of your home has fallen below the outstanding balance of the first mortgage. In other words, your second mortgage may be eliminated if you owe more on the first mortgage than what the property is worth. Eliminating second mortgages is just another example of the many benefits of Chapter 13 bankruptcy. To learn more, contact us to schedule your free consultation with an experienced bankruptcy attorney.
A loan modification is an agreement between you and your current lender to modify the terms of your existing loan. An agreement of this type occurs more frequently when you can no longer afford the original loan terms and it is not in the lender’s financial interest to foreclose. There are at least 5 ways to permanently change the loan terms. These include: interest rate reductions, extension of the loan payment period, capitalization of mortgage arrears (past-due amount is added to the principal balance of the loan), reduction of principal balance, and deferred junior mortgages.
While loan modification sounds like the perfect solution, unfortunately not everyone qualifies for a loan modification and it does not always stop the foreclosure process. Many people rely on the promises made by their lender’s representative only to find that their request is denied shortly before the pending sale date of their property. It is important that you speak to an experienced attorney to examine your options and save your property.
Bankruptcy Experience That Works for YOU
Attorney Nella E. Mariani has more than a decade of experience in bankruptcy, debt relief, and bankruptcy litigation. Her practice focuses exclusively in bankruptcy and debt relief matters. She works closely with each client and provides them with a high degree of knowledge, professionalism and sensitivity.
If you need to speak to an experienced Illinois bankruptcy attorney, contact the Law Offices of Nella E. Mariani, P.C. to schedule your FREE CONSULTATION