How to Use Chapter 13 to Prevent Foreclosure on Your Home


If you do qualify for a Chapter 13, then you will have up to five years to pay back the payments you’ve missed. This buys you some serious time! Let’s pretend that your mortgage payment is $2,000 each month. If you have missed six payments, then you are behind $12,000. With a Chapter 13, you would be given up to 60 months to pay back that $12,000.

If you have two mortgages on your home, Chapter 13 can help in another way. If the fair market value of your home is less than the amount of your first mortgage, a Chapter 13 bankruptcy cancels the second mortgage. This is called a “lien strip.” Let’s pretend your home is valued at $500,000, and you have a first mortgage of $600,000 and a second mortgage of $200,000. Your first mortgage is greater than the fair market value of your home, so at the end of your bankruptcy, the second mortgage goes away.

JC Law Group PC is owned and operated by San Francisco bankruptcy attorneys, Jeena Cho and Jeff Curl. We assist individuals, families and small businesses with bankruptcy protection in the Northern District of California.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jeena Cho, JC Law Group PC | Attorney Advertising

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