Saving a House Through Chapter 13 Bankruptcy

Georgia bankruptcy attorney assists clients looking to stop foreclosure

There are many reasons why homeowners might miss mortgage payments. It is often due to circumstances outside their control. But regardless of the reasons, lenders don’t hesitate to foreclose. Fortunately, many Georgians have been able to stop foreclosure through Chapter 13 bankruptcy. At Jeff Field & Associates, you can rely on us to analyze your finances, create a Chapter 13 repayment plan that can prevent foreclosure and establish a feasible program to get current with your mortgage obligation.  

Automatic stay halts the foreclosure process

An immediate effect of filing for Chapter 13 bankruptcy is that the court will issue an automatic stay. This means that all collection activity must stop, including foreclosure actions against homeowners with past due mortgages. If you are concerned about avoiding foreclosure in Georgia, the automatic stay gives you and your attorney the opportunity to review your overall financial situation and develop a sound repayment plan without the looming threat of removal from your home. 

Using bankruptcy exemptions to save your house

Our firm advises clients on using Georgia bankruptcy exemptions to protect their homes. Individual homeowners can preserve up to $21,500 of equity in their primary home. A married couple is entitled to shield up to twice that amount, or $43,000. If your equity exceeds the exemption level, your home might have to be sold in a Chapter 7 bankruptcy, but you’d keep either $21,500 or $43,000, depending on your marital status. The personal property exemption of $5,000 can stop household items from being liquidated as long as the total value does not exceed that figure. 

Benefits of Chapter 13 over Chapter 7 for homeowners

While a Chapter 7 debt discharge can benefit many people with serious credit-card or medical debts, it usually is not the ideal solution for holding onto their homes. A mortgage is a secured debt, which means that it is not dischargeable through a Chapter 7. The lending institution still has the ability to foreclose on the borrower’s home, subject to any allowable exemptions. By contrast, Chapter 13 bankruptcy can stop a foreclosure as long as the debtor abides by the terms of the confirmed repayment plan, which can be drafted to give a homeowner the opportunity to catch up on back payments.    

Creating a repayment plan to repay a mortgage

Filing for Chapter 13 bankruptcy does not guarantee that you will keep your house. However, it can allow you to meet your current obligation while paying off the past due balance over a period of years. Without this type of relief, you could lose your home in a matter of months or even weeks, depending on how far behind you are on payments. Our firm is dedicated to finding the best way to keep families in their homes as they move toward financial stability. 

Eliminate other debts to make mortgage payments affordable

Many people who have difficulty paying their mortgage also have other serious debt issues. With a Chapter 13 plan, you can get other debts under control, which can free up more money to pay off missed mortgage payments over time. One option frequently used by people with burdensome vehicle loans is a “cram down.” This allows a car or truck owner to reduce the amount of their secured debt to the actual value of the vehicle. Any amount owed beyond the vehicle’s value is reclassified as unsecured debt and included in the monthly payments to the trustee. 

Speak with a Georgia attorney about saving your home through Chapter 13 bankruptcy 

Jeff Field & Associates advises Georgia residents threatened with foreclosure about how they might be able to protect their home through Chapter 13 bankruptcy. For a consultation, please call 404-381-1278 or contact us online. Our offices are in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale.