Mortgage payment changes in bankruptcy

| Nov 13, 2015 | Chapter 13 Bankruptcy |

Many people in Texas who file for Chapter 13 bankruptcy do so because they would like to be able to keep their home. Because Chapter 13 is a debt repayment plan, it is critical that the homeowner and the bankruptcy trustee be kept up-to-date on any changes in payments to creditors. This is because the majority of the homeowner’s income is going toward paying off old debt. Changes can significantly disrupt the homeowner’s budget and repayment schedule.

Recently, Wells Fargo settled claims filed by homeowners who were in bankruptcy. These homeowners alleged that Wells Fargo failed to give them the 21-day advance notice that their mortgage payments would change. This notice is required under federal bankruptcy law. Wells Fargo will pay out over $80 million dollars to homeowners affected by this issue.

Homeowners who are in Chapter 13 bankruptcy often have significant concerns about their rights and responsibilities while in a repayment plan. This is understandable; while these people would like a fresh financial start, they also want to meet their obligations. Unfortunately, the debtor may find him or herself dealing with daily creditor harassment, mounting interest and trying to stop foreclosure on his or her home. This can be incredibly stressful and make addressing financial problems even more difficult.

People who are having financial challenges may benefit from speaking with an experienced bankruptcy attorney. Legal counsel can outline the eligibility and other requirements of both Chapter 7 and Chapter 13 while describing the forms of debt relief that might be applicable to a client’s particular set of financial circumstances.