Pelley Law Office LLP
Dallas Office
Plano Office
Sherman Office
214-733-1775
972-608-0335
903-813-4778

No Charge For Initial Consultation ($250 value)

Menu Contact

Over 80 Years Of Combined Experience

View Our Practice Areas

Halting foreclosure through Chapter 13 bankruptcy

Homeowners in Texas who are both overwhelmed by unmanageable debt levels as well as the specter of foreclosure may be unaware that filing Chapter 13 bankruptcy can both provide relief from their debt as well as halt the foreclosure of their home. Unlike the liquidation under Chapter 7, Chapter 13 bankruptcy provides a vehicle through which filers may take control of their delinquencies and save their homes.

Chapter 13 involves the creation and approval of a repayment plan for the filer's secured and unsecured debts, including and delinquencies. Through the repayment plan, debtors may stretch out repayment of the mortgage delinquency owed over a period of three to five years, as established by the trustee of thebankruptcy estate.

During the repayment period, the mortgage lender may not continue with foreclosure proceedings. As long as the debtor makes payments as ordered, the repayment can allow them to get back on track and halt foreclosure. Upon filing of the petition, further collection activities will be halted. When the debtor completes the repayment schedule, any remaining unsecured debt will be discharged, and the debtor will be able to continue with the mortgage payment schedule. Trustees may convert second mortgages into unsecured debts under certain circumstances, removing the property liens held by those lenders. This means that any amount remaining at the end of a repayment plan owed to the second lien holder will be discharged.

While choosing to file bankruptcy may be a difficult decision for most people, the potential relief afforded by it may outweigh the negatives of doing so. The possibility of saving a person's home from foreclosure is often a significant impetus in choosing to file a Chapter 13 bankruptcy petition. A bankruptcy attorney can provide assistance throughout the process.

Source: Sfgate.com, "What Do Mortgage Companies Do With Chapter 13 Bankruptcy?", M.C. Postins, accessed on Jan. 11, 2015

No Comments

Leave a comment
Comment Information

Awards & Recognition

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Locations

Plano office
Sherman office
Dallas office

Plano Office
1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
Map & Directions

Sherman Office
905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
Map & Directions

Dallas Office
6060 North Central Expressway, Suite 602
Dallas, Texas 75206

Phone: 214-733-1775
Map & Directions