You may be interested in Chapter 13 bankruptcy in Ohio if you are having a hard time keeping up on your mortgage payments. By filing for bankruptcy, you may be able to catch up on payments and avoid foreclosure.
Are you wondering how you can stop for closure in Ohio by filing for bankruptcy? If so, check out this article, where we will be discussing Chapter 13 bankruptcy in Ohio and how it can help you manage your mortgage payments.
What is Chapter 13 Bankruptcy?
There are several different types of bankruptcy options you have available depending on your situation. The most common options are Chapter 7 and Chapter 13 bankruptcy, both of which come with different pros and cons and apply to different situations.
Chapter 13 is a unique type of bankruptcy that uses repayment plans. So, instead of requiring you to give up many of your belongings to pay back creditors, you are given a repayment plan that spans 3 to 5 years. The purpose of this repayment plan is to allow you to catch up on your payments and debts while being able to meet your necessary living expenses.
Generally, Chapter 13 is available to those who do not qualify for Chapter 7 bankruptcy due to having a higher income.
If you aren’t sure what type of bankruptcy is the best fit for your situation, you can hire a bankruptcy attorney in Ohio. An attorney will be more familiar with the differences and qualifications, helping you to find the best fit for your financial needs and goals.
Who Qualifies For Chapter 13?
In order to file for Chapter 13 bankruptcy, you must have a stable income, have the desire to repay some of your debt, and believe that the financial crisis is only temporary. There are also certain requirements for how much unsecured debt and secured debt you can have to qualify for Chapter 13. These amounts are adjusted periodically, so you may need to do your research beforehand to ensure they apply to you.
The main purpose of Chapter 13 is that it provides financial stability as you repay as much debt as you can over a 3 to 5 year period, so that you can get back on your feet.
How Chapter 13 Works for Past-Due Mortgage Payments
If you fall behind on your mortgage payments, eventually this will lead to foreclosure proceedings. This can be a devastating situation to find yourself in, but the good news is that Chapter 13 bankruptcy in Ohio can help.
Chapter 13 specifically addresses missed mortgage payments, allowing you to catch up and get current. Mortgage arrears in Chapter 13 allow you to address late or unpaid mortgage payments by having them included in your repayment plan. You will also be protected from any collection or foreclosure actions from creditors by an automatic stay that takes affect once you file for bankruptcy.
Keep in mind that you will need to have enough income to be able to keep up on your current mortgage payments and other basic living expenses as you catch up on late payments. As long as you follow the requirements of your repayment plan, this is a good solution that can help you avoid foreclosure.
Pros and Cons of Using Chapter 13 to Save Your Home
If you are on the fence about whether or not Chapter 13 bankruptcy is the right fit for your situation, you need to weigh the pros and cons. There will always be advantages and disadvantages to certain options, and you also have to consider your future financial goals.
Here are the main advantages of filing for Chapter 13 bankruptcy to save your home from foreclosure:
- You are protected by an automatic stay.
- You can avoid foreclosure by catching up on late and current mortgage payments.
- Your repayment plan will be created to allow you to meet your basic living expenses.
- If you’re financial situation changes, you can request that your repayment plan be altered to reflect this.
Also, here are some potential disadvantages you may experience if you choose to file for Chapter 13 bankruptcy:
- You must be willing to make a 3 to 5 year commitment to catch up on your debt.
- To qualify for mortgage arrears, you must be able to pay your normal monthly mortgage.
- You will have to follow a strict payment schedule or risk defaulting on your repayment plan.
- You will have very little extra financial resources until your repayment plan is paid off.
FAQ Section
Can Chapter 13 stop a foreclosure sale already scheduled?
Yes, in many situations, once you have filed for Chapter 13 bankruptcy, a scheduled foreclosure sale will not be able to continue. Keep in mind that in some instances, this may only delay foreclosure, and you will have to come up with another strategy for avoiding it altogether.
Will I lose my home if I miss a Chapter 13 payment?
If you miss your Chapter 13 payments or fail to follow the requirements outlined in your repayment plan, your plan will be defaulted. If this happens, your case may be dismissed or the automatic stay may be removed and will no longer protect you, and your lender could ask the court to proceed with foreclosure.
Do I need my lender’s approval to file Chapter 13?
No, it is your right to file for bankruptcy with or without your lender’s blessing. However, they will be notified of this since they are listed as one of your creditors.
What happens if I sell my home during Chapter 13?
If you sell your home during the duration of your Chapter 13 plan, this can significantly alter your repayment agreement. The bankruptcy court will oversee the sale, ensuring creditors receive fair treatment. Also, your bankruptcy trustee must approve the transaction before it goes through.
Hire a Bankruptcy Attorney in Ohio
If you are behind on your mortgage payments and cannot keep up, Chapter 13 bankruptcy can be a good option. Richard P. Arthur, Attorney at Law, has extensive experience handling bankruptcy cases and can help you determine the best bankruptcy option for catching up on your mortgage payments. To proceed with your bankruptcy case, contact us today at 937-254-3738 for a free consultation.