Help! Save my house from foreclosure!
We take a lot of these calls in our office. We have answers for these callers. Every month, we save houses from foreclosure using federal bankruptcy protection. This is Reason “H” for filing bankruptcy.
In Texas, houses go up for sale at foreclosure auction the first Tuesday of each month. Most houses are held in a deed of trust. The court process is usually not needed to place a house in foreclosure. Texas is known as a non-judicial foreclosure state. Most deeds are held by a Trustee and the Trustee can quickly place the house in foreclosure without a court order. This means that my house could be up for sale in as little as 60 days from when I stop paying my house note.
Because a house can be foreclosed in as little as 60 days, I generally don’t have a lot of time to pursue non-bankruptcy options. Rest assured; any bankruptcy saves my house from foreclosure. However, Chapter 13 bankruptcy is the method that I use to cure mortgage arrears. Not only will the chapter 13 stop the sale, it will allow me to pay back all of the money I am behind on over 36 to 60 months. This money is paid back interest free and is paid to a bankruptcy trustee.
In the Houston district, my monthly mortgage payment is paid through the bankruptcy trustee. So once my payment plan is filed, my mortgage company starts receiving my regular house payment and then I pay the Trustee an extra amount each month that starts “chipping” away at the back money owed on the house. As long as I remain current with my monthly trustee payments, the mortgage company leaves me alone and lets me get the house current.
The good thing about the chapter 13 plan is that I don’t have to being my loan current within just a few months. I can take up to 5 years (or 60 months) if I need to. The other good thing is that I can pay off my car or truck loan in the plan. This is especially helpful if I have a high interest rate on my vehicle, because here in Houston, we pay vehicle loans at only 5.25%. I can also pay off INTEREST and PENALTY free IRS income taxes or state sales taxes. This is very helpful if I have a small business and owe the IRS. Finally, like the regular Chapter 7 bankruptcy, I am able to discharge my unsecured debt. We typically pay just pennies on the dollar on my unsecured debt. Keep in mind that some unsecured debt like child support or student loans are not discharged.
So in then end, when my payment plan is finished, 1) my house is current, 2) my car or truck is paid off, 3) my back taxes are paid in full; and 4) the remainder of my unsecured debt is discharged. For most of us, this means that we are DEBT FREE except for my house.
Additionally, while I am in the chapter 13 repayment plan, I have an attorney that looks our for me and helps me when any issues arise. I have the bankruptcy rules and law protecting me every step of the way. I have a bankruptcy trustee who monitors my case, pays my debts and accounts for all it if there are any disputes. And finally, I have a bankruptcy Judge there to make sure all of my creditors follow the rules and to make sure that I receive my proper due process.