Chapter 13 Reorganization
The Chapter 13 “Reorganization, allows you to consolidate all your debts into one low monthly payment. The payment amount is tailored to your budget. Chapter 13 is technically a Bankruptcy, but viewed differently since it is not a “straight bankruptcy”. Which simply eliminates all debt without any payment whatsoever. Instead, it consolidates all missed mortgage payments or “arrears”. Then spreads the repayment out over 3-5 years. The net result is that your mortgage is legally reinstated by Federal Court Order. And you continue to make your normal mortgage payments. The lender is also under strict scrutiny to account to the Federal Court. Any fees they attempt to assert over your normal mortgage payments.
For example, if you are $9,000 in arrears on your mortgage, and your monthly mortgage payment is currently $3,000. Your Chapter 13 payment would be approximately $150 per month. (60 months x $150 =$9,000) The new total monthly house payment would be $3,150. The Chapter 13 program results in a more realistic repayment plan. The short term plans currently offered by most lender outside of the laws under Title 11, and you maintain all your rights under TILA, RESPA, HOEPA, FDCPA, FCRA, etc.
Resource Links on Foreclosure:
IRS questions and Answers on Home Foreclosures and Debt Cancellation: CLICK HERE
Sample 1099C Cancellation of Debt for issued by lenders to borrowers: Download File 1099f
How did we get to this Subprime Mortgage mess: Download Subprime Files
Understanding Securitization: Download Securitization Files
Consumer Home Mortgage Information, provide by California Department of Real Estate
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