If you want to keep the house and you’re behind on the mortgage, but have little or no unsecured debt then the first option we’ll explore is a loan modification. If you have some unsecured debt, then we’ll explore a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy you can pay off the arrearage interest free plus all or a portion of your unsecured debt over 3-5 years. Once the Chapter 13 bankruptcy is filed you must resume making the regular monthly mortgage payments as well so the key is whether you have enough income to make the plan payments and a mortgage payment.
This approach works best in a Chapter 13 bankruptcy: you have regular monthly income and can afford monthly mortgage payments outside bankruptcy plus the bankruptcy payments.
At the end of the Chapter 13 bankruptcy plan period you will have caught up the mortgage arrearages, you’ll be debt free , and you will resume making your regular mortgage payments.
Learn more about your loan modification options by contacting us for a free in‑person or online consultation today.