If you are worried that you may lose your home in foreclosure, you can enter into Chapter 13 bankruptcy and schedule a repayment plan lasting between three to five years. This can help you save your home and stop collection attempts.
If you are being hassled by your lender about payments, this process creates an automatic stay that goes into effect preventing the bank from taking action against you. Additionally, if you have a junior mortgage, also known as second or third mortgages, a Chapter 13 bankruptcy allows you to discharge them.
Unfortunately, the Baltimore Business Journal reported that foreclosures in Maryland increased in August 2014 by 20 percent over the same month last year. The news outlet reported that state foreclosures were also up 71 percent from July 2014.
The Baltimore-area was hit particularly hard by foreclosures, as the rate ranked third in the nation with one in every 17 properties facing a foreclosure filing. Not all of the news was bad—the state foreclosure rate actually dropped nationally from second in the U.S. to third.
Experts said that the jump stems from recent litigation in Maryland that required banks to restart the foreclosure process on abandoned homes that were sitting empty.
How Can a Bankruptcy Help Me Prevent a Foreclosure?
Aside from entering into the repayment plan that comes with a Chapter 13 bankruptcy, if you are no longer interested in keeping your home, you can enter into Chapter 7 bankruptcy, which allows you to discharge any debt that falls outside of the current value of the property, tax-free. This debt is known as the “deficiency amount.”
If you are interested in saving your home or discharging your debt through bankruptcy, contact our foreclosure attorney. In addition to bankruptcy, other options may be available to you, including loan modification and mediation.
Do not ignore any pending legal action against you over your home. If you avoid working with your lender or taking legal action on your own behalf, it will be harder for you to save your property, and you may give up several rights. For more information about foreclosure prevention, call us at (202) 483-6070.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: The discharge of a junior mortgage through Chapter 13 bankruptcy is known as a “lien strip”.