Stopping Home Foreclosure in Georgia With Chapter 13 Bankruptcy

The foreclosure rate in Georgia is one of the highest in the country. According to RealtyTrac, the number of foreclosures in Georgia was one in every 352 housing units, nearly double the national average of one in 652 housing units.

Many homeowners facing foreclosure want to save their homes, but feel like they have no options. Loan modifications can be difficult. Many people who attempt to negotiate loan modifications on their own have found themselves facing foreclosure. Mortgage assistance programs may not be any better.

In Atlanta, foreclosure prevention begins with experienced legal advice. People are often unaware that they can use Chapter 13 bankruptcy to prevent or stop foreclosure and get caught up on their back payments.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is sometimes known as a repayment plan. Filing Chapter 13 bankruptcy allows an individual to follow a repayment plan approved by the court. The repayment plan gives the person time to catch up certain debts and pay off other debts while protecting the person from foreclosure, repossession or other legal action.

Not all debts are paid in full. Unsecured creditors, such as credit card companies and medical entities, hold the lowest priority for debt repayment in a Chapter 13 plan. As a result, they get paid after other debts, such as home mortgage arrears, are paid. A person usually ends up paying a smaller amount of money to his or her unsecured creditors than he or she owes under a repayment plan.

How Chapter 13 Bankruptcy Helps Save Homes

An automatic stay protects a person as soon as they file bankruptcy. By law, creditors must suspend all collection efforts, including foreclosure, as soon as the automatic stay goes into effect. As long as the individual facing foreclosure files bankruptcy before the foreclosure sale date, the foreclosure can be stopped.

Filing Chapter 13 gives people time to become current with mortgage payments through the bankruptcy repayment plan, and the lender cannot proceed with foreclosure. The individual will remain protected provided the individual continues to make mortgage payments and Chapter 13 plan payments.

If You are Facing Foreclosure, Contact an Attorney Right Away

The prospect of losing your home is extremely stressful. Getting notice that the mortgage lender is foreclosing on a home can be a stressful event. If you are facing foreclosure, talk with an experienced bankruptcy attorney who can discuss your situation with you and review your financial choices with you.