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Stop Foreclosure with a Chapter 13 Bankruptcy

6/23/2015

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You may be able to save your house from foreclosure by filing a Chapter 13 bankruptcy in Alabama.  A Chapter 13 bankruptcy allows you to put your arrearage (the payments you have missed) in your Chapter 13 plan and pay them back over the term of your plan (usually 5 years).  You will have to pay the entire amount of your arrearage back over this period of time.  This in effect “catches up” your mortgage payments, keeping the mortgage company from foreclosing.

Other than allowing you to catch up your back payments the bankruptcy court cannot affect the terms of your mortgage.  Therefore, beginning the month after you file for bankruptcy you will have to begin making your regular monthly mortgage payments. 

This can be difficult since you were already missing payments and now you are to begin making your mortgage payments again plus a payment to the bankruptcy court.  This will require some serious budgeting and discipline, but it will be very important for you to make both of these payments.  While there may be some ways to prevent foreclosure if you miss payments post-petition (i.e. after your bankruptcy has been filed), it will be difficult.  You will also have to maintain your homeowner’s insurance coverage.

To stop the foreclosure your bankruptcy will need to be filed prior to the foreclosure sale.  The 2005 amendments to the bankruptcy laws have made the preparation of bankruptcy petitions much more time consuming.  I would recommend you see an attorney immediately and not later than 1 week prior to the foreclosure sale.

The bottom line is while it may take some cutting back on other expenses, a Chapter 13 bankruptcy in Alabama can save your house from foreclosure.

Do you have questions or comments regarding this topic?  Please call my office or email me through this website and/or make an appointment to see me in my Hartselle, AL office for your free, no obligation, consultation.

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Hartselle Plaza

800 U.S. Highway 31S

Suite B

Hartselle, AL  35640


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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
The Collins Law Offices help clients file for bankruptcy protection under the laws of the United States. 
Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.
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