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The founders of our country understood that a fresh start under federal law is so essential to the fiscal health and economic vitality of our country; they included the right to file bankruptcy in Article 1, Section 8 of the United States Constitution.
Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current through a Chapter 13 Plan over a three to five year period. You must file the Chapter 13 case BEFORE the mortgage company completes the foreclosure sale under state law; otherwise, the Chapter 13 filing will be ineffective to stop the foreclosure.
The underlying mortgage is not affected by the bankruptcy filing. After filing a Chapter 13 bankruptcy, the debtor must make their mortgage payments beginning with the next payment which comes due after the case is filed. Each mortgage payment made after the bankruptcy is filed should include only the current principal and interest and current property tax and homeowner's insurance escrows, if any, and is paid directly to the mortgage company. A separate payment is made to a Chapter 13 trustee to catch up payments which were in arrears as of the date of the Chapter 13 case filing. The mortgage arrearage payments do not bear any interest.
Contact us today to learn more about your options under the current bankruptcy laws. We're here to help. Have questions on filing for bankruptcy and need a Dallas bankruptcy attorney or a Fort Worth bankruptcy attorney? The Patrick D. West Law Firm, P.C. has been providing bankruptcy and debt solution legal counsel for over 20 years. The law office serves bankruptcy clients in these DFW area cities in both Dallas & Tarrant Counties: Dallas, Fort Worth, Arlington, Irving, Grapevine, Grand Prairie, Euless, Bedford, Hurst, Haltom City, Burleson, Colleyville, Mansfield, Keller, Saginaw, West Lake, Richland Hills, Coppell, Lewisville, and more