Even though we are emerging from the recent recession, many property owners are still behind on mortgage payments. With stable income, you may be able to catch up on those payments, if the bank would just work with you.
Inability to Cure All Arrears At Once.
It is not uncommon for a home owner to be able to make ongoing payments, but have difficulty paying off all previously missed payments in one single cure amount. They just need some time for a repayment plan. This dilemma may be compounded by the fact that the property value has rebounded and the bank is unwilling to work with the homeowner. Even if you have decent income, and the property has equity, you may still be facing foreclosure.
Bankruptcy: A Solution When Behind on Mortgage Payments
You are likely reading this article because you are unable to work out an arrangement with your bank. You are behind on mortgage payments, but able to catch up, if given some time. Unfortunately, if your property has substantial equity, the bank has no incentive to work with you, because it can capture that equity itself in a foreclosure sale.
In such instances, bankruptcy may be an powerful solution. The bankruptcy filing halts any foreclosure sale of the property. And, in chapter 13 (often referred to as an individual reorganization), the owner can propose a plan to cure those missed mortgage payments. If the property is the owner’s primary residence, there will be restrictions on modifying the terms, but the owner can still cure those arrears over the life of a chapter 13 plan (either 36 or 60 months). If the property is not the owner’s primary residence, there may actually be some additional options available to the owner, including adjusting the term or the interest rate on the mortgage. Even if you are significantly behind on your mortgage payments, there are options to bring you current. A chapter 13 bankruptcy may well be your most powerful tool to catch up, when you are behind on mortgage payments.