Can I Get Caught up on My Mortgage in a Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is a type of bankruptcy that allows individuals to reorganize their debt and get caught up on missed payments, including mortgage payments. It is also known as a “wage earner’s plan” because it is typically used by individuals who have a regular income.

When filing for Chapter 13 bankruptcy, the individual, also known as the debtor, will propose a payment plan to the court that lasts for three to five years. This plan will detail how the debtor plans to catch up on missed mortgage payments and how they will continue to make current mortgage payments during the bankruptcy process.

One of the main benefits of a Chapter 13 bankruptcy is that it allows the debtor to keep their home. If the debtor is able to catch up on missed mortgage payments and continue making current mortgage payments according to the payment plan, they will be able to keep their home and avoid foreclosure

However, it is important to note that a Chapter 13 bankruptcy will not eliminate the debtor’s mortgage debt. The debtor will still be responsible for paying off the mortgage, but the payment plan allows them to do so over a longer period of time and potentially with more manageable payments.

It’s also important to note that the debtor will need to adhere to strict guidelines and deadlines in order to successfully catch up on missed mortgage payments and avoid foreclosure. The debtor should work with a bankruptcy attorney to ensure that their payment plan is feasible and realistic, and that it meets the requirements of the court.

The debtor’s income, expenses, and assets will be evaluated during the bankruptcy process to determine whether their payment plan is reasonable and feasible. The court will take into consideration the debtor’s ability to pay, their current income and expenses, and the value of their assets.

One of the most important requirements of a Chapter 13 bankruptcy is that the debtor must have a regular income. If the debtor is unemployed or has a very low income, they may not be able to afford the payments outlined in the payment plan and the case may be dismissed.

Additionally, the debtor must also attend credit counseling before filing for bankruptcy and complete a personal financial management course before their case is discharged.

It’s also important to note that certain debts, such as back taxes, child support, and student loans, may not be included in the payment plan and will still need to be paid in full during the bankruptcy process. A bankruptcy attorney can help the debtor understand which debts will be included in the payment plan and which will not.In conclusion, a Chapter 13 bankruptcy can be an effective way for individuals to catch up on missed mortgage payments and avoid foreclosure. However, it is important for the debtor to work with a bankruptcy lawyer in Millbrook to ensure that their payment plan is feasible and realistic, and that they meet all the requirements of the court. The debtor must also have a regular income, attend credit counseling and complete a personal financial management course. It’s also important to note that certain debts may not be included in the payment plan, and will still need to be paid in full during the bankruptcy process.