Once you’ve filed for Chapter 13 bill consolidation bankruptcy, your next step is to formulate a plan to “cure” or make up the past due mortgage payments and bring your account current. That will include any late fees and other fees and costs your mortgage company has levied. And, depending on the way your mortgage is worded, you may also be liable for interest fees charged on the amount past due. However, specific provisions of the Bankruptcy Code allow you to set up these payments over a period of 36 to 60 months.
The amount of the monthly payment necessary to catch up on your mortgage depends on how much you owe and the term set by your Chapter 13 plan. For example: if you have to pay $6000 to get your mortgage back to current, you could pay as little as $100 per month for 60 months. But, there are many variables, and your payment will depend on your specific circumstances.
Although Chapter 13 bill consolidation bankruptcy cannot lower the amount of your current monthly mortgage payments, it can usually substantially reduce or even eliminate many of your other monthly payments, enabling you to resume making your home mortgage payment each month.
Protection During Your Chapter 13
Your home mortgage lender must immediately treat your home mortgage as if it were current, once your Chapter 13 payment plan is confirmed by the Bankruptcy Court. You must be given full credit for timely monthly installment payments during your case, and you cannot be charged late fees on the amount due. Your payments will be applied to principal as though your account had already been made current. You are also protected from being charged unnecessary “junk fees.” At the end of your case, the Chapter 13 trustee will file a motion and obtain a court order recognizing that you are current through the end of the term of your Chapter 13 payment plan.
After Your Chapter 13 Case
Once you have completed your Chapter 13 bill consolidation bankruptcy case, with the exception of your home mortgage or other similar long-term obligations, you should be debt free. You will also have gained experience in formulating and executing a financial repayment plan to become debt free, which should help you avoid future financial problems.
What To Do If Chapter 13 Is Not An Option
If your home has already been foreclosed, or if you do not have the income to support a Chapter 13 plan, a Chapter 7 fresh start bankruptcy could help by simply eliminating debt left owed from the sale’s short fall balance due. You may not be able to discharge certain debts in a Chapter 7 bankruptcy, but any deficiency balance due from the foreclosure will be wiped out. This will give you a fresh start.
Contact Us Today
Nothing short of bankruptcy, the most powerful debt relief tool available, is likely to provide relief once you’ve been foreclosed. We can help. Call Robert Raley Bankruptcy Attorney today at 318-747-2230 or set up an appointment by visiting our contact page.