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Reorganize Your Debt through Chapter 13 to Stop Foreclosure on Your Home

Lenders across the country continue to foreclose on homeowners who fall behind on their mortgage payments. Each month, hundreds of Georgians lose their homes at foreclosure sales. You can file for bankruptcy under Chapter 13 to stop foreclosure. If you qualify, Chapter 13 not only protects your property, but also forces your creditors to halt other debt collection activities.

At the moment you file a Chapter 13 petition, an injunction, known as an automatic stay, prevents your creditors from taking any further collection actions. Creditors may not contact you by phone, file lawsuits against you or proceed with garnishment, repossession or foreclosure. In most cases, the automatic stay lasts until end of your bankruptcy case.  In order to keep your home, you must make all the payments under your Chapter 13 repayment plan.

The bankruptcy process uses the following factors to determine if you qualify under Chapter 13:

  • Income ― You must have enough disposable income to pay toward your debts. Disposable income equals the amount of income remaining after subtracting specific expenses and required payments. You can use income from your regular salary, self-employment, pension, disability, etc.

  • Debt ― You may not have more than $1,149,525 in secured debts. Secured debts include your mortgage and auto loans. Also, your unsecured debt must be under $383,175.
  • Income tax ― You must submit proof to the Bankruptcy Court that you filed federal and state income taxes over the past four years prior to filing bankruptcy.

Once you've met the filing requirements, you must create a repayment plan for your debts.  Chapter 13 allows you to reorganize debt and structure affordable payments that can extend from 36 to 48 months.  One of the advantages to Chapter 13 is your ability to negotiate with creditors to repay less than the full amount of the debt you owe. After the court approves your repayment plan, you'll make payments to the bankruptcy trustee assigned to case.  The trustee is responsible for distributing your payments to your various creditors in accordance to your repayment plan.

Keep in mind that you must fulfill all of your payment obligations under your repayment plan, or the bankruptcy court could dismiss your case.  If this happens, the automatic stay is lifted and your creditors could resume collection activities, including foreclosure.

Atlanta foreclosure lawyers can help you keep your property by filing Chapter 13 bankruptcy. Contact DebtStoppers, Bankruptcy Law Firm Robert J. Semrad & Assoc., LLC.

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