Can bankruptcy help save my home.

Bankruptcy can help your save your home from foreclosure in a few different ways. Under the present bankruptcy laws, if you file either a Chapter 7 or a Chapter 13 bankruptcy, it will stop the foreclosure process, but you still need to have to cure the mortgage delinquency somehow.

Chapter 7 bankruptcy is a temporary stop to the foreclosure process, but it might give you a short period of time to sell or refinance your property. Chapter 13 bankruptcy will give you up to five years to catch up the missed mortgage payments, or a longer period to sell or refinance your home mortgage. Exactly how this process works needs to be looked at on a case by case basis, and you should always speak to an experienced bankruptcy lawyer in your town or city to determine what you can do. Click here to learn more on the foreclosure process.

Most families who want to save their home will take the Chapter 13 bankruptcy route to get time to cure the mortgage arrears. If they do this, they normally have to be in a position to make the ongoing (regular) monthly payments in addition to whatever Chapter 13 plan payment is required by the courts.

Right now, if a family has residential mortgage payments that they cannot afford to pay, even filing for Chapter 13 bankruptcy can’t help them modify the mortgage payments. Under the current bankruptcy law, you homeowners can’t modify a residential mortgage in bankruptcy court, except other than to provide for the cure of the past due payments. Read more on when to file bankruptcy.

However, this is expected to soon change since Congress is strongly considering changing the bankruptcy law to allow mortgage modifications, which would then allow bankruptcy court judges to oversee the modification of residential home mortgages to make the mortgage affordable. If this is passed, the new bankruptcy law is expected to allow mortgage modification by changing monthly payments, interest rates, mortgage length, and also possibly lowering the loan balance due under the right conditions.