A chapter 13 bankruptcy might be a good option for you to consider. A chapter 13 is often used to get caught up on arrearages to save a home. You would need to file a bankruptcy before any scheduled foreclosure sale if you want to try to save the home, so you might want to look at your options sooner rather than later.
If you are interested in discussing your options I offer a free consultation at my office.
Very best regards,
Errin P. Stowell
Stowell Law Firm, LLC
350 Saint Peter Street, Suite 224
Saint Paul, MN 55102
We are a debt relief agency. We help people file for relief under the Bankruptcy Code.
Yes, you could file a Chapter 13 bankruptcy before the Sheriff's mortgage foreclosure sale. In a Ch. 13 case you pay the mortgage arrears through the Ch. 13 Plan and you start paying your regular mortgage payments going forward. In your case of course, the arrears will be quite high if you haven't paid in a year, so your Ch. 13 Plan payment has to be large enough to pay the arrears over a maximum of 60 months. You have to demonstrate that you can pay the Plan payment and the regular mortgage payments going forward. Don't wait to talk to an attorney until a few days before the Sheriff's sale as there are a lot of requirements to file bankruptcy now.
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Yes, bankruptcy will (temporarily) delay the foreclosure sale. Chapter 13, in particular, as the other attorneys have rightly noted, permits debtors to pay their mortgage going forward while paying the arrears in the plan. In addition, bankruptcy courts in Minnesota have interpreted the bankruptcy laws as permitting a chapter 13 debtor/mortgagor to strip off the junior liens on the debtor's principal residence to the extent that the mortgage note is entirely, rather than merely partially, unsecured. Unfortunately, my experience has been that a chapter 7 bankruptcy often results in a motion for relief from the automatic stay, which is routinely granted, and a resumption of the foreclosure process during the pendency of the bankruptcy. One other option available to you is an affidavit of postponement pursuant to Minn. Stat. § 580.07, which delays the sale for five months in exchange for a shortened redemption period. Your best choice really depends on your individualized goals and financial situation (for example, can you catch up on the arrears soon, from earnings or another source of capital?).
The Errin Stowell answer is correct. A Chapter 13 bankruptcy proceeding will allow you as much as five years to get caught up with your mortgage arrearages, provided that you can also make the regular mortgage payments at the same time. If you don't need that much time, a Chapter 7 bankruptcy may be better. With a Chapter 7 bankruptcy filing you will be able to delay the foreclosure proceeding (if you file the bankruptcy petition before the sheriff's sale) for a few months only. I'd be glad to answer more questions if you care to contact me.
Yes, filing Chapter 13 will get a stay on the foreclosure (stopping it temporarily), until the Chapter 13 is complete. A Chapter 13 might also help you keep your home. Good luck!
Chapter 13 bankruptcy permits one to cure ("cure" is a cute way to say repay) mortgage arrears through an up-to-60-mo. chapter 13 payment plan. Chapter 13 bankruptcy can also resolve other debt problems.
This answer (by San Diego bankruptcy attorney, Asaph Abrams) doesn’t address all facts & implications of the question; it’s general info, not legal advice to be relied upon and exceptions may apply. It creates no attorney-client relationship; it may be pertinent only to CA and/or its Southern District Bankruptcy Court in San Diego. It’s independent of other answers. It may be time sensitive, as in past the “Use by” date: laws and case law change. Hire a bankruptcy lawyer before acting or refraining from bankruptcy or other legal action.
The above answers correctly state that you could flle a Chapter 13 case before the foreclosure sale to keep your home. A chapter 13 case would allow you to cure your default over an extended period of time, while maintaining the regular monthly payment that comes due after the case was filed. Another benefit of Chapter 13 is that in some cases it can eliminate a second mortgage from your home. This is called "lien stripping". It is possible when the current fair market value of the home is less than the amount owed on the first mortgage.