The mortgage foreclosure
Many people file a Chapter 13 bankruptcy simply because they have no other choice and need to avoid a mortgage foreclosure or Sheriff’s sale.
Jack and Kate owned their home for 12 years and were very happy with their neighborhood and the local school district. They had always been current on their mortgage payments and were able to pay their other bills.
Then Jack walked into work one morning to find he had been given a temporary layoff. Even though Kate had a full-time job, Jack’s unexpected layoff left them short on cash.
Jack registered for unemployment compensation, but that amount was not close to his former salary. Jack and Kate were unable to make the mortgage payments on their house and they received notices that foreclosure proceedings had begun. In addition, they had also fallen behind on their utility bills and credit card payments. They felt hopeless.
Pittsburgh bankruptcy attorney
By the time they contacted Steidl and Steinberg, there was a Sheriff’s Sale pending on their home. They were in serious danger of losing it.
Fortunately, Jack received a call to return to work and was earning his full salary again. He offered to make payments to the mortgage company to cover his past due balance, but the lender refused to accept any payment less than the total due. The lender also expected Jack and Kate to compensate them for all late charges and the attorney’s fees for the foreclosure work.
Jack and Kate were in trouble. They could try to sell their house for an amount necessary to fully repay the mortgage and their other creditors. But they didn’t want to sell their house. Even if they had wanted to sell it, the housing market was sluggish. They needed to take action quickly to avert the foreclosure.
Chapter 13 bankruptcy
A Chapter 13 repayment plan was an excellent alternative. The Chapter 13 bankruptcy allowed them to pay the regular monthly mortgage payments and still pay an additional monthly amount toward the mortgage arrears and other unsecured debt. In the end, they could stay in the home they loved!
For bankruptcy help, contact Steidl & Steinberg today.