KEEP YOUR HOUSE WITH CHAPTER 13
HONOLULU CHAPTER 13 BANKRUPTCY ATTORNEY SERVING CLIENTS THROUGHOUT THE HAWAIIAN ISLANDS
If you are facing foreclosure on your home, it may help to know that there are legal options available that may be your best bet for stopping the foreclosure dead in its tracks. Call my office right away to discuss using Chapter 13 of the U.S. Bankruptcy Code to place an immediate stay (stop) on all legal actions against you, including foreclosure.
MORTGAGE MODIFICATION REQUESTS ARE RARELY APPROVED — HERE’S WHY
You have probably heard many television and radio commercials advertising loan modification services by law firms and for-profit businesses. Let me assure you, banks and mortgage lenders don’t make money by reducing the terms of their loans. And when was the last time you heard of a banker willing to lose money?
Banks and mortgage lenders loaned you the money at a certain interest rate based on the rate they paid to borrow the money from their prime lender. Shareholders expect a certain rate of return on their investment. Reducing the interest payment or principal will cut into their profit margins — something financial executives simply aren’t willing to for the average customer.
Even if you agree to restart your monthly payments, banks will insist on collecting the full amount of arrearage you owe, in a single payment. For many homeowners, this can amount to many thousands of dollars — virtually impossible to scrape together on short notice. A Chapter 13 bankruptcy gives you up to five years to repay the mortgage arrearage while staying current on regular mortgage payments after filing. As long as you do that, they cannot foreclose.
STRATEGIES FOR AVOIDING FORECLOSURE — HOW CHAPTER 13 HELPS
When you file Chapter 13, you are using the law and the courts to your advantage. The day you file, all foreclosure proceedings and collections lawsuits against you will come to an immediate stop. To keep your house, you will need to agree to continue to pay the future mortgage payments per the original terms of the loan. Then, after 30 days, you must begin repaying bankruptcy trustee a predetermined monthly amount, in order to complete repayment of the arrearage with a maximum repayment time of five years. By meeting the terms of the debt restructure plan, your house will be safe from foreclosure.
While you are in the Chapter 13 plan, you may of course continue to try to modify your mortgage. Anecdotally we have seen many people who could not get mortgage modifications before bankruptcy but after filing were able to obtain one. If you are successful in agreeing with the lender to a modification, the Court will approve it. Once approved the mortgage arrearage is rolled into the principal and the terms of your chapter may be modified to lower the monthly payment to the trustee and/or shorten the length of your plan.
Even if you cannot get a modification after filing as long as you meet your plan repayment schedule, at the end of the case, you will be current on your mortgage.
STOP WORRYING ABOUT FORECLOSURE AND DO SOMETHING ABOUT IT. CALL THE RIGHT LAWYER.
Watch my videos and read my articles to learn more about ways bankruptcy can help.
I invite you to learn more about avoiding or stopping a foreclosure through Chapter 13 bankruptcy. No matter where you reside in the Hawaiian Islands, call or send an email to my office in Honolulu to schedule a free initial consultation. I will explain your options and help you see a brighter tomorrow.