When the foreclosure moratorium ends at the end of this month, thousands of individuals will be faced with the stark reality that a foreclosure is looming.
In addition, many forbearance programs, a process where a lender agrees that an individual doesn’t have to make a payment for a period of time, will also be expiring soon. Individuals who communicated with their lender to ensure that they didn’t have to make monthly mortgage payments may have been given wrong or misleading information. Some lenders are putting the payments that should have been made on the back-end of the loan, effectively extending the loan. However, some lenders will be requesting a lump sum equal to the payments that would have been due and owing up front once the forbearance ends.
Here is how a Chapter 13 bankruptcy can help you in Nebraska:
- Stop Foreclosure. With the bankruptcy being filed, you enter the protective bubble called the automatic stay. Creditors must stop the foreclosure process the second your bankruptcy is filed. You then can bring your mortgage current through your plan.
- 3-5 Year Plan. You put forth a plan that lasts 3-5 years. At the end of the plan, you are debt free!
- Handle Creditors Unwilling to Work with You. Creditors are essentially dragged into your bankruptcy. A creditor has 70 days to file a claim. If they don’t, they don’t get any payments and are eliminated 100%.
- Easy Wage Withholding. If you’re employed, the plan payment is made from a wage withholding, meaning you no longer have to run around each month trying to figure out how and when you are going to make payments on your debt.
- Asset Protection. Creditors can’t take your property, garnish your wages, or repossess a vehicle while you are in the bankruptcy making plan payments. You retain your property.
- Protect Co-debtors. The Ch. 13 automatic stay extends to co-signors or guarantors on your debt.
- Eliminate Non-Support Obligations. In a Ch. 13 bankruptcy you can eliminate non-support obligations stemming from a divorce decree. If you are left paying a property settlement but no longer have the funds or income to do so, a Chapter 13 may be a great solution.
- Cram down a Car Loan. If you owe more than your vehicle is worth and you acquired the car more than 910 days ago, you can do what is called a cram down, meaning you only pay what the vehicle is worth in your plan instead of what is owed.
- Pay Only a Percentage of Debt Back. In many cases, you only end up paying a percentage of your general unsecured debt (i.e. credit cards and medical bills) back. For example: You have $100,000 of credit card debt. You may only pay 50% or $50,000 back. The other 50% gets eliminated (discharges) at the end of your plan.
Instead of worrying what will come next, meet with a bankruptcy attorney to discover your options tailored to your situation.