Receiving a foreclosure notice is often traumatic, especially if you’ve been doing everything you can to earn money and pay your bills. You may be struggling to pay your mortgage for a variety of reasons that can include a job change with a lower salary, an increase in regular living expenses, unexpected medical care, or even a divorce that leaves you struggling to pay your bills. With a chapter 13 bankruptcy, Utah residents can work to stop or pause foreclosure proceedings. Working with a bankruptcy attorney is imperative to ensure you complete the process correctly.
Automatic Stay Prevents Foreclosure
When you file for chapter 13 bankruptcy in Utah, an automatic stay is put into place to prevent your creditors from trying to collect on debts. This includes credit cards from banks or businesses and mortgage companies. Unless your home has already sold through a foreclosure listing, then you should have time to try and save your home. During the automatic stay, you can work with your attorney and the mortgage company to figure out how you can pay off your debts and keep your home.
The automatic stay prevents most creditors from collecting on debts or continuing with foreclosure without court permission. The need for court permission is why most people are able to buy themselves some time when it comes to foreclosure.
Creating a Chapter 13 Repayment Plan
One thing you and your attorney will do is create a chapter 13 repayment plan. When you file for chapter 13 bankruptcy in Utah, the repayment plan allows you to create an affordable repayment plan so that you can pay off your creditors and mortgage holder. Your attorney will work to create a plan that allows you to pay back your missed mortgage payments and keep your home.
You must pay the debts to a trustee who will pay your mortgage lender. Once you catch up on the missed payments, while still making your current mortgage payment, you are no longer behind and at risk for foreclosure. While you may not want to file for bankruptcy, it may be the only option if you want to keep your home and receive an affordable repayment plan.
