Bankruptcy can provides a financial fresh start. It can be used in conjunction with modification options and will delay or stop foreclosure. We offer two types of consumer bankruptcy: Chapter 7 and Chapter 13. Either type of bankruptcy may qualify a homeowner to receive a modification and keep their home when they otherwise would lose it. Talk to The Rogers Law Group to explore how bankruptcy could save your home.
Bankruptcy - Chapter 7
In a Chapter 7 bankruptcy case, an individual eliminates personal liability for most types of debts, including credit cards, medical bills, personal loans, and mortgages. An individual may keep some or all property under exemptions in the bankruptcy code which prevent the bankruptcy trustee from selling such protected assets to pay creditors
A Chapter 7 can improve the financial condition of homeowners to the extent they can afford their current mortgage payments, or qualify for a loan modification.
Bankruptcy - Chapter 13
In a Chapter 13, debts are consolidated and sometimes reduced in a three to five year payment plan. Chapter 13 bankruptcy can stop a foreclosure proceeding and force the lender to accept a repayment plan. This can be used to pay back mortgage arrears with no additional interest. It can also be used to pay off other debts such as credit cards or medical bills, for as little as 10% of the balance due, with payments over 5 years at no interest.
Chapter 13 Lien Strip - a spectacular opportunity
When your home is underwater, one way to begin building equity back is through a unique benefit of Chapter 13 – lien stripping. A lien strip may allow you to pay off your second mortgage through your bankruptcy plan for as little as 10% of the balance due over 5 years with no interest.
How does it work?
- The value of your home must be less than the first mortgage balance due (so if you were to sell your home for its market value, there would not be a single penny available to pay the second mortgage company).
- The junior mortgage is listed in the bankruptcy as an unsecured debt (like a credit card).
- Results of the Means Test (analysis of your income and expenses) do not require you to pay 100% of your unsecured debts.
- The mortgage company will be given the opportunity to dispute the lien strip
- You make all of your Chapter 13 payments according to the approved plan
- The lien is removed from your property at the time your bankruptcy is discharged!
A lien strip may allow you to pay off your second mortgage for as little as 10% of the balance due over 5 years with no interest. For example, you might pay off a $50,000 second mortgage for only $5,000 with payments of $83 per month for five years!
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