Faced with Greensboro foreclosure? Chapter 13 can help
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Your Greensboro, North Carolina home is not just a potentially valuable asset but you and your loved ones likely also have an emotional attachment to the house. You made memories there and want to keep your home. But if you fall behind on your mortgage payments, you could lose your property. Chapter 13 can help you catch up and put an end to foreclosure threats.
Have You Been Sent a Foreclosure Notice?
Some mortgage companies are very aggressive and if you run a few days or a week or two late on your mortgage payment, they may send a letter threatening foreclosure. However, in most cases, it’s usually a few months before a lender seriously pursues this option. It can be costly for the lender and it’s easier for them to have you in the home making your regular payments.
If you get a letter threatening foreclosure, that’s not a foreclosure notice. It’s essentially a collections effort. A Greensboro foreclosure notice is different because it notifies you that your home will be sold in an auction and tells you the specific date the auction will take place. In Greensboro, these are at the Guilford County courthouse. You have until the auction to file Chapter 13 bankruptcy to stop the foreclosure.
Chapter 13 and Foreclosure
To get into a Chapter 13 bankruptcy repayment plan, you must have regular income in a sufficient amount to pay your current monthly secured payments (mortgage and auto loans) plus installment payments to catch up past-due balances on your mortgage and other secured debt plus some on your unsecured delinquent debt. All that is on top of your standard living expenses.
Once your attorney files your Chapter 13 bankruptcy case, the foreclosure process is stopped. So long as you continue to make your plan payments, your home will be safe and your lender can’t try and foreclose. Another benefit of Chapter 13 is that if you have a second mortgage, you might be able to strip it off (i.e. discharge it) if you don’t have a lot of equity in your home.
What Debts Can Be Discharged in Chapter 13?
Chapter 13 buys you time to catch up on your past-due mortgage payments to save your home from foreclosure but has benefits for some car loans, too. If your car loan is more than a couple of years old and you owe more than car is worth, you might be able to get a cram-down on the loan. What that means is that the balance owed can be lowered to the value of the car.
In addition, your interest rate might be lowered to a fairer market rate if you’re paying a high rate of interest. This can make your debt more affordable. Credit cards and medical bills will often pay out for far less than you owe sometimes as low as pennies on the dollar. You can come out of Chapter 13 current on your mortgage and with little (or no) unsecured debt.
Should You Save Your Home?
Before you file Chapter 13, it’s a good idea to evaluate whether saving your home is a good idea. It’s wise to look beyond your emotional attachment to the property and consider if it’s smart to keep the home. If you have no equity, or negative equity, and you’re struggling to make the mortgage payments, surrendering the home to foreclosure might be the best thing for your financial future. You can surrender your home and shed other debt in Chapter 7 and walk away with a clean slate.
To find out more about saving your home from foreclosure using bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free Greensboro bankruptcy consultation at one of our North Carolina locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.