How to Catch Up on Your Mortgage Payments
Sometimes unforeseen financial burdens can cause someone to fall behind on their mortgage payments. Whether it’s mounting medical bills or the loss of a job, not being able to handle mortgage payments only adds more stress to an already disconcerting situation. Thankfully, Chapter 13 bankruptcy can be a viable option in helping you catch up on your mortgage payments to save your home from foreclosure. Here’s how the process works.
How Chapter 13 Bankruptcy Works With Mortgage Payments
Also known as reorganization bankruptcy, Chapter 13 bankruptcy can allow you to catch up on your mortgage payments through an “automatic stay.” Once you file your bankruptcy petition, the “automatic stay” goes into effect immediately and prohibits lenders from moving forward with further action in starting foreclosure proceedings. Once you are in Chapter 13 bankruptcy, your mortgage payments will be re-structured through a 3 to 5-year plan that will allow you to get current on your mortgage payments.
Second Mortgages and Bankruptcy
Second mortgages differ vastly from primary mortgages in that they are treated as unsecured debt. Unsecured debt is not attached to collateral, such as credit cards. In some cases, your second mortgage can be stripped off in its entirety through Chapter 13. However, depending on your financial situation, it may make more sense to file Chapter 7 bankruptcy to alleviate a second mortgage.
Second Mortgages and Debt Settlement
If bankruptcy altogether is not an option, second mortgage settlement can also be a viable solution. Second mortgage settlements work similarly to credit card debt settlements in which you and the mortgage holder have an agreement where you can pay less than you owe.
Contact a Southern California Bankruptcy Lawyer
If you’ve been struggling to keep up with your mortgage payments, it may be time to enlist the help of an experienced bankruptcy attorney. Your Southern California bankruptcy lawyer will guide you in finding the best course of action to tackle your mortgage problem.
Contact Wadhwani & Shanfeld at (800) 996-9932 today for a free consultation. We’ll answer all your questions and ease your financial concerns.