Can someone file chapter 13 when their mortgage is already 8 months (and counting) late?

Question

Bankruptcy, Chapter 13

Answer 1

Yes you can, up till day of foreclosure.  The arrearages on the mortgage will be put into the plan for you to repay.  Once you file let the mortgage company know the lawyers name-phone & your case #.  This will stop all action.  I am amazed that you are 8 months behind & still not foreclosed on!  Keep in mind a 13 makes you pay back 100% of secured debt (house, cars etc.) but only a small % of credit cards & unsecured debt.  However, the trustee tends to not leave you with very much left each week.  Good luck!

Answer 2

Beverly was so close.  You can file a Chapter 13 and keep your house up to the day before a sheriff's sale (this is post foreclosure).  But don't wait that long.  It takes a whie for an attorney and his/her staff to prepare your case prior to filing, and you need to do some court required credit counseling.

And, it is true, you will need to pay back 100% of any secured debt on any item (house, car) that you want to keep.  Though you can sometimes get rid of a second mortgage in bankruptcy if it is unsecured due to the first mortgage eating up the equity in the home.

The amount you pay unsecured creditors (credit cards, medical bills) will be based on your disposable income and the amount of equity you have in real or personal property.  This can be anywhere from 0% to 100%.

It's best to talk to an attorney.  Most bankruptcy attorneys (don't go to just any attorney) offer free consultations. Just call your local bar association to get a few numbers, make an appointment and ask when you make it whether the first visit is free.

At the first consultation, the attorney will ask you a number of questions and tell you what they think of your situation.  You will need enough monthly income to actually pay for your mortgage in order to succeed in a Chapter 13.

I wouldn't worry about ruining your credit.  If you are 8 months behind on your mortgage, your credit is already pretty rough and will likely improve if you complete a Chapter 13.

Good luck there are many success stories of people who went through foreclosures, then Chapter 13s and came out a success.