The Bankruptcy Law Network has posted an article about what happens if you fall behind on mortgage payments while undergoing Chapter 13 bankruptcy. If payments become delinquent after filing for Chapter 13 “the lender’s recourse is to file a motion for relief from stay, which is a request that the judge lift bankruptcy protection to allow the lender to initiate foreclosure proceedings. ”
There is a filing fee of $150 for relief and the lender’s attorney will also charge a fee. However, mortgage companies are usually open to relief settlements because they know bankruptcy judges won’t grant their motion if it appears that the homeowner can catch up on payments. Bankruptcy judges generally want those filing Chapter 13 to keep their homes. However, you will probably still have to pay various fees and “run the risk that the judge might order a less generous settlement or that the judge might grant the motion and all the foreclosure process to start.”
The best solution to this problem is to avoid falling behind on mortgage payments, but if you have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.
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