Boca Raton Chapter 13 Bankruptcy Lawyer
If you are struggling with past-due mortgage payments or other secured debt delinquency, you are certainly not alone. Florida has one of the highest foreclosure rates in the country. Since it is a non-judicial foreclosure state, lenders in the Sunshine State need not obtain court orders to take adverse action against these homeowners. Legally, most banks can begin the foreclosure process after one missed payment.
Occasionally, the bank or a government agency offers a temporary foreclosure relief program. These initiatives come and go. But the reliable Boca Raton Chapter 13 bankruptcy lawyers at the Law Offices of Stephen Orchard are always here for you. We do more than handle all the nuts and bolts of your complex bankruptcy case. We also unlock a number of advanced features which, in many cases, can save your family thousands of dollars.
How Chapter 13 works
Chapter 13 is commonly known as a debt adjustment or wage earner’s plan, and for good reason. Rather than simply wipe out your debts, a Chapter 13 adjusts your debts – discharging some and lowering others – and comes up with an overall payment plan that enables you to pay off your creditors with one monthly payment over a three or five year period. If you have a steady job and enough disposable income to contribute to a monthly payment plan, Chapter 13 may be right for you.
Although it does not “wipe the slate clean” like a Chapter 7, Chapter 13 is easier to qualify for than a Chapter 7. A Chapter 13 is also easier on your credit report than a Chapter 7, and you don’t have to worry about losing any assets in a Chapter 13 proceeding. If you have a regular income, and if your debts are mostly tied to secured assets, such as a home, car, furniture or appliances, a Chapter 13 may be the road to achieving financial freedom and responsibility over a relatively short period of time.
Civil judges have the power to stop foreclosure sales in a few cases. But they only use this power if there is clear evidence of lender fraud or other misconduct. In contrast, Section 362 of the Bankruptcy Code immediately stops adverse creditor actions, like:
- Wage garnishment,
- Collection lawsuits, and
As the name implies, the Automatic Stay usually takes full effect when our Boca Raton Chapter 13 bankruptcy attorneys file legal paperwork. There’s no need to prove fault, wrongdoing, negligence, or anything else. Additionally, the amount of delinquency is irrelevant. Even if you are tens of thousands of dollars behind, the bank cannot touch your home.
Typically, the Automatic Stay remains in effect for up to five years in a Chapter 13. So, debtors can repay delinquency using an income-based repayment plan.
Protected Repayment Period
At a meeting with a Chapter 13 trustee (person who oversees the bankruptcy for the judge), the debtor works out an income-based repayment plan. Typically, Chapter 13 debtors make a monthly debt consolidation payment, which the trustee then divides among allowed claims. “Allowed claims” are mostly past-due secured debts. Certain unsecured debts are included as well, as are administrative costs.
Assuming the repayment plan meets minimum legal requirements, the trustee usually approves it. If that happens, creditors cannot demand immediate payment or more money. Instead, they must wait in line for their money like everyone else.
When the protected repayment period ends, the judge usually discharges (forgiver) remaining unsecured debt. So, you have a zero past due balance on your home loan, auto loan, and other secured loans, and no medical bills or credit card bills to pay. That’s the very definition of a fresh financial start.
During your bankruptcy, our professional team negotiates with lenders to obtain more favorable terms, such as a lower interest rate or an extension of the loan repayment period.
Other advanced options are available for homeowners as well. The strip-off is a good example. Assume Max used 80/20 financing to buy a $200,000 home. Market and other conditions have reduced his home’s value to $190,000. A judge could declare that $10,000, which is a good portion of the junior lien, to be a dischargeable unsecured debt. If that happens, Max could save hundreds of dollars a month.
Adjust Your Debts and Save Your Home with Chapter 13 Bankruptcy
In 2005, Congress changed the Bankruptcy Code in ways that made it harder for people to qualify for Chapter 7 bankruptcy. However, even if you don’t qualify for Chapter 7, you are likely still eligible to file a Chapter 13 bankruptcy. In fact, depending upon your particular situation, it may be better for you to file Chapter 13 than Chapter 7. Read on for more information about how Chapter 13 can help you find effective, lasting debt relief. For immediate assistance or to find out which type of bankruptcy is right for you, call our Boca Raton Chapter 13 bankruptcy lawyers at the Law Offices of Stephen Orchard in Boca Raton at 561-455-7961.
Save your home from foreclosure
One of the most powerful features of Chapter 13 bankruptcy is its ability to save your home from foreclosure. Missed mortgage payments can be rolled into your debt adjustment plan and amortized over a three or five year period, enabling you to catch up on your mortgage comfortably and curing the default, so that the bank cannot foreclose. Also, if your home is burdened with a second (or third) mortgage, but you are under water or upside down on your first mortgage, meaning you owe more to the bank than your home is worth, a Chapter 13 bankruptcy judge or trustee can strip away that second mortgage, or cram down your first mortgage to where the balance you owe is more in line with what your home is actually worth on the market.
If you are currently in default on your mortgage, a Chapter 13 bankruptcy is only one option which may be available to you. The Law Offices of Stephen Orchard practices both bankruptcy and real estate law. Attorney Stephen Orchard can look at your situation and determine whether you may have valid defenses to a foreclosure action. If so, we will provide strong advocacy and defense against a judicial foreclosure in the Florida courts.
Call Today to Speak with an Experienced & Dedicated Boca Raton Chapter 13 Bankruptcy Lawyer
To determine whether Chapter 13 bankruptcy is right for you, or to explore your options for moving toward financial freedom, call the Law Offices of Stephen Orchard in Boca Raton at 561-455-7961.