As you officially ring in the new year, the last thing you may want is to start with your home teetering on the brink of foreclosure. That is, you may face the unfortunate reality that you struggle to keep up with your monthly mortgage payments on top of all your other expenses. You may be able, and all the more willing, to pay off the rest of your mortgage payments if only they were set at a lesser amount each month. With this, you may turn your consideration toward a bankruptcy declaration. Well, read on to discover whether you can lower your mortgage payments with bankruptcy and how a seasoned Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help protect your home and other valuable assets during this time of financial strife.
Can I lower my mortgage payments with Chapter 13 bankruptcy?
Specifically with a Chapter 13 bankruptcy filing, you may be eligible to lower your monthly mortgage payments. This is because this bankruptcy type comes with a court-ordered, three- to five-year repayment plan. Through this plan, you may pay the rest of your outstanding debts in full, at a rate more manageable for you and your given financial situation. This is to say that, through this schedule, your mortgage lender may be willing to renegotiate a payment plan that lowers your monthly interest rates or extends the duration of your payments.
Ultimately, their readiness to work with you may be because it would be costly for them to initiate a foreclosure action on your home. Even so, your Chapter 13 bankruptcy declaration comes with an immediate automatic stay placed on your home. This is to say that your mortgage lender may be unable to initiate or continue a foreclosure action even if they want to.
What other considerations should I make before filing for Chapter 13 bankruptcy?
Say, for instance, that you owe more in outstanding mortgage payments than your home is actually valued. On top of this, say that you have multiple mortgage loans on your home. Under circumstances such as these, you may consider lien stripping through your Chapter 13 bankruptcy process.
Essentially, lien stripping is a legal process in which you may remove junior liens (i.e., second or third mortgages on your home) and make the debt unsecured. With this, once you complete your three- to five-year repayment plan successfully, the New York State bankruptcy court may order to discharge this unsecured debt along with your others. However, you must understand that you may still be expected to pay the full principal mortgage on your home rather than having it reduced to its fair market value.
In conclusion, before entering the legal arena, you must retain the services of a competent Rockland County bankruptcy attorney. Reach out to The Law Offices of Allen A. Kolber, Esq. today.
