Law Office of Rick J. Deal, P.C.
Facing Foreclosure in Texas? Know Your Options Before the Sale
How Chapter 13 May Help You Stop Foreclosure
File a Chapter 13 Case
A Chapter 13 case must be filed before the foreclosure sale occurs. Once the case is filed, the automatic stay generally takes effect and prohibits the mortgage creditor from proceeding with the foreclosure sale.
Make Your Mortgage Payments Through the Plan
If you are behind on your mortgage when the case is filed, your ongoing monthly mortgage payments are made through the Chapter 13 Trustee as part of your Chapter 13 Plan, rather than being paid directly to the mortgage company.
Catch Up the Mortgage Arrears
Your past-due mortgage payments are also paid through your Chapter 13 Plan. The arrears can generally be spread over the life of the plan, which may be three to five years depending on the applicable disposable-income requirements and your circumstances.
The Automatic Stay Can Stop the Foreclosure
When a Chapter 13 bankruptcy is filed, the automatic stay generally takes effect immediately and prohibits creditors from continuing most collection activity. If your foreclosure sale has not already occurred, the automatic stay may stop the mortgage company from proceeding with the sale.
You May Have Years to Catch Up
Chapter 13 generally allows you to cure past-due mortgage payments through your Chapter 13 Plan instead of paying the entire delinquency at once. Depending on the applicable plan requirements, your repayment period may extend from three to five years.
Your Mortgage Is Paid Through the Chapter 13 Plan
When you are behind on your mortgage, your Chapter 13 Plan provides for both your ongoing mortgage payments and the amounts necessary to cure your pre-bankruptcy mortgage arrears. You make your required Chapter 13 payment to the Trustee, who administers payments under the Plan.
Address Your Other Debts at the Same Time
A Chapter 13 Plan can address more than your mortgage. Depending on your circumstances, the Plan may also provide for vehicle loans, taxes, credit cards, medical bills, and other debts while you work toward bringing your mortgage current.
What to Do When Facing Foreclosure
1.
Contact Our Office Immediately
If you have received a foreclosure notice or know that a sale has been scheduled, contact our office as soon as possible. Be sure to tell us the scheduled foreclosure date.
4.
File Before the Foreclosure Sale
Your Chapter 13 case must be filed before the foreclosure sale occurs. Filing generally triggers the automatic stay, which prevents the mortgage creditor from proceeding with the scheduled sale, subject to applicable exceptions.
2.
Schedule Your Consultation
We will review your mortgage situation, income, debts, and the amount you are behind to determine whether Chapter 13 may provide a workable solution.
5.
Begin Your Chapter 13 Plan
After filing, you begin making the required Chapter 13 Plan payments. When you are behind on your mortgage, the Plan provides for your ongoing mortgage payments as well as repayment of the pre-bankruptcy mortgage arrears.
3.
Provide the Required Information
If you decide to proceed, we will need financial documents and information necessary to prepare your Chapter 13 bankruptcy case and proposed repayment plan.
6.
Complete Your Plan and Receive Your Discharge
After making all required Chapter 13 Plan payments and satisfying the other requirements of your case, you may receive a Chapter 13 discharge. By that time, your pre-bankruptcy mortgage arrears should have been cured through the Plan, allowing you to move forward with your mortgage current.
Is Your Home Already Scheduled for Foreclosure?
If you have received a foreclosure notice or know the date your home is scheduled to be sold, contact our office as soon as possible. A Chapter 13 bankruptcy filed before the foreclosure sale may stop the sale and provide a way to catch up your mortgage arrears through a Chapter 13 Plan.
Do not wait until the day of the foreclosure sale to seek legal advice.