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- If your home is about to go into foreclosure, or you are in foreclosure, a Chapter 13
is what can be used to save your home.
- A Chapter 13 is a bankruptcy that lasts from 3 years (36 months) to 5 years
(60 months). During that time, you pay your regular mortgage and car payments in addition to a monthly payment to the Bankruptcy
Trustee assigned to your case.
- The check to the Bankruptcy Trustee includes a small amount of money which goes toward
catching up on your mortgage arrears, tax arrears and car payment arrears, if any. In addition, a portion will be applied
to your unsecured debt (typically credit cards, personal loans and medical bills).
- This is done by filing a "Plan"
with the Court which shows the Court how long it will take for you to catch up, and how much money you will be paying to the
Bankruptcy Trustee each month.
- The mortgage company is forbidden by the Court from taking your home, or taking any
legal action against you during this time. In fact, they can't even write to you or call you on the phone!
- Once you
have caught up, your bankruptcy ends and you go back to paying your mortgage as you did prior to falling behind. The mortage
company cannot discriminate against you or take any action against you for having filed for Chapter 13.
- In a Chapter
13, you keep all of your assets! You will not loose anything as long as you keep up with your Chapter 13 plan payments, current
monthly mortgage payments, and automobile payments (if any).
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