Stop Home Foreclosure through Bankruptcy
Arizona Home Foreclosure
The prospect of losing one’s home is unbearable. Arizonans are losing their homes to foreclosure at twice the national rate. Reasons may vary, including outrageous balloon payments, medical bills or smothering debt.
If you are struggling to keep current with mortgage payments but want to avoid foreclosure, a Marana bankruptcy attorney can help you save your home. He may suggest legal strategies such as Chapter 13 bankruptcy, loan modification or debt negotiation.
At Vidrine Law Firm, PLC, we help individuals and families in Southern Arizona avoid foreclosure and obtain relief from pre-existing debt.
Filing for Chapter 13 bankruptcy allows you to:
- Stop foreclosure – If your mortgage company has begun foreclosure proceedings, filing for Chapter 13 bankruptcy can put a halt to foreclosure activity.
- Become current on payments – pay back mortgage arrears according to your 3 to 5 year Chapter 13 bankruptcy plan.
- Strip away and eliminate second mortgages (home equity lines of credit).
Chapter 13 Bankruptcy: The Wage Earner’s Plan
Chapter 13 bankruptcy is often called the wage earner’s plan. If you are working steadily and want to keep your home, Chapter 13 may be the answer. You may have the option of resuming your monthly payments and paying any missed payments over the life of the
bankruptcy repayment plan.
How Bankruptcy Can ‘Strip Away’ Home Equity Loans
Many homeowners find themselves behind in payments when they take out a home equity loan (second mortgage) in addition to their regular mortgage payment.
A home equity line of credit, or “HELOC,” is extended to a homeowner, using his house as collateral. If you are unable to pay back the loan, the bank or finance company can foreclose on your home.
In a Chapter 13 bankruptcy filing, the court may allow you use a “lien strip” to remove a second mortgage and eliminate the debt.
If the current fair market value of your property is worth less than what you owe on your first mortgage, then the bankruptcy judge can deem the home equity line of credit an unsecured debt. The HELOC can then be stripped away (forgiven) after the required 3 to 5 year repayment period.
Keep in mind that you will still be required to pay your first mortgage during your repayment plan.
Other Options to Avoid Home Foreclosure
We want you to stay in your home and avoid foreclosure. We may first recommend a loan modification. This is a process which can change the terms and conditions of your loan. If home loan modification is not right for you, or if you do not qualify, then bankruptcy may be the best option for you.
Solutions to Life’s Biggest Challenges
Facing the threat of home foreclosure may be the biggest challenge of your lifetime. At Vidrine Law Firm, PLC, we provide a comfortable and confidential environment in which to discuss bankruptcy or loan modification and to help you save your home. Call us today to arrange a free consultation. Our telephone number is 520.885.1106.
