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How to Save My Home Through Bankruptcy

Falling behind on your mortgage payments can be a traumatic experience to a homeowner. Often times communication with the bank or loan servicer leads to more questions than answers. That is where an experienced real estate and/or bankruptcy attorney in Texas can help. It is important to note that bankruptcy is not appropriate for everyone, but your real estate and/or bankruptcy attorney should be able to help you determine if it is right for you.

Filing Bankruptcy in Texas may provide an option to you as a debtor to catch up on past due mortgage payments and bring your mortgage current. A Chapter 13 Bankruptcy in Texas allows a debtor to reorganize their creditors. Specifically, a Chapter 13 Bankruptcy allows you to pay arrears on secured debt such as a mortgage over a period of 36 to 60 months. At the same time it can decrease or completely eliminate payments on unsecured debt such as credit cards. In addition, a Bankruptcy filing in Texas will delay or prevent a pending foreclosure if the Bankruptcy case is filed prior to the sale date, which in Texas is the first Tuesday of the month.

This is because once a debtor seeks protection through bankruptcy an automatic stay is immediately put into place. The automatic stay legally prohibits your creditors from maintaining collection activities during the remainder of the time your bankruptcy is before the court.

Following the filing of the bankruptcy case, the debtor that was at risk of foreclosure must make payments to the Chapter 13 Trustee under the terms of the Chapter 13 Plan created by the debtor along with the assistance of their real estate and/or bankruptcy attorney here in Texas. The plan created by you and your attorney will require payment of mortgage arrears that existed prior to the filing of your bankruptcy.

Additionally, to preserve your interest in your home, you will be required to make your normal monthly mortgage payment. However, should you fail to make the required payments under the Chapter 13 Plan the bankruptcy court can dismiss the case or the mortgage company can seek relief from the automatic stay to move forward with the foreclosure.

With the help of your real estate and/or bankruptcy attorney you may discover that Chapter 13 in Texas is beneficial to you. With proper planning and guidance Chapter 13 bankruptcy can provide you the ability to prevent foreclosure and catch up on previously missed payments, while you focus on reorganizing your finances without the stress of continued collection activities from your creditors.

-Written by Eric Days (Partner at Guerra | Days Law Group)

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