Question: I'm facing a foreclosure on my house. I need to stop the bank from taking my home. I'm behind on my mortgage payments. I haven't paid in about 6 months and now I got a letter saying that I was going to be foreclosed. My sister told me that if I file bankruptcy the foreclosure will stop. I can make my house payments now because I got a new job. But I have all those arrears because I haven't paid in 6 months.
I lost my job because I came to work drunk a few times. I admit that I shouldn't have done that but I was going thru a tough time and I just started drinking. I was sober for several years but then I started again.
I worked for a major company and I guess it wasn't a good fit. I worked for the company for over 15 years but things got stressful because of overseas competition and I had to work harder and then I found myself in trouble with booze.
Basically I stopped paying the mortgage and I tried to sell my car, a boat and some paintings that I collected over the years to get some money. I thought my financial situation would turn around quickly, but it didn't.
At least now I have a job and I can pay the house note. But I need to stop the foreclosure.
R.Y. in Alpharetta, GA
Answer: It sounds like you need to file a chapter 13 bankruptcy to prevent a foreclosure. If you file a chapter 13, you can pay-off any of the mortgage arrears over 5 years (usually).
With a chapter 13, you will have to make your mortgage payments going forward, but the 6 months of mortgage payments that you owe can be paid-off under the bankruptcy plan over 5 years.
And just as mortgage arrears can be put into a bankruptcy, so can car payments. We have a number of clients who utilize a chapter 13 to pay off car note arrears. You can put the car loan arrears into a chapter 13 and pay it off over 5 years as well.
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