When struggling with debt in Oregon, many people shy away from seeking bankruptcy protection in fear that it will cost them their property, including their homes. However, filing for Chapter 13 itself does not put your home in jeopardy. In fact, it might help you to protect and keep your home through your bankruptcy case.
Even if you are facing overwhelming debt, you may have managed to stay current on your mortgage loan payments. Consequently, you may not be at risk of losing your home, despite your financial strains. After filing for Chapter 13 bankruptcy, you may keep your house if you continue to make your regular monthly mortgage payments. While you may have kept up with your home loan on your own, there are circumstances in which the court or bankruptcy trustee may require you to include your mortgage in your repayment plan.
If you are behind on your mortgage, foreclosure may seem imminent. However, you may be able to stop a foreclosure and keep your home through Chapter 13 bankruptcy. According to the U.S. Courts, when you file for Chapter 13, an automatic stay will immediately halting all foreclosure proceedings. You may be allowed to catch up on your mortgage arrears through your repayment plan. Provided you are caught up and current on your payments by the time your Chapter 13 plan is completed, you may be able to avoid having the foreclosure on your home re-initiated.
Depending on your circumstances, you may have a home equity line of credit or junior mortgages that are also tied into the equity in your home. Through Chapter 13 bankruptcy, these loans are often stripped off and they become a part of your unsecured debt. Then, you will pay all, or a portion of them, off through your repayment plan. Thus, filing for Chapter 13 bankruptcy may lighten the amount you owe each month on your home, and help you to keep it.
This post has provided an overview of Chapter 13 bankruptcy and home mortgages. It is important to remember, however, that the circumstances of each case are unique. Therefore, you should not take this as legal advice and instead should only consider it as general information.