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Chapter 13 bankruptcy is often used to save a person's home or investment property  from foreclosure. Under chapter 13, you are allowed to stop the mortgage foreclosure case and propose a plan to reorganize your mortage payments. The chapter 13 case though must be filed before the foreclosure sale.

Cure Mortgage Arrearages

One typical plan provides for the catching your past due mortgage payment. The chapter 13 plan usually involves paying off the mortgage arrearage over a 3 to 5 year period in addition to making your regular ongoing monthly mortgage payments.

The Bankruptcy Court's New Loss Mitigation Mediation Program

The Bankruptcy Court in Miami started a new mortgage mediation program on April 1, 2013. It has been very successful in other parts of Florida where the program was previously instituted several months ago. Under this program a mediator is appointed by the Bankruptcy Court to assist in the process and documents and communications are exhanged over a special internet portal.

Avoid Second Mortgage 

If your home has decreased in value, sometimes you are able to wipe out or "avoid" your second mortgage. For example, if you owe $300,000 on your first mortgage and $100,000 on your second mortgage and your home has gone down in value to $250,000, there is no equity or value to "secure" the second mortgage. Under these circumstances, the chapter 13 plan (and related section 506 motion) may provide to wipe out or avoid the second mortgage lien. The $100,000 debt owed on the second mortgage will be wholly unsecured and usually only receive a small dividend like the credit cards receive -- typically around five cents on the dollar.

A certified copy of the order avoiding the second mortgage may be recorded in the county public records to document that the second mortgage is void.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.

Chapter 13 and chapter 7 bankruptcy are the types of bankruptcy used by individuals to obtain debt relief.  Chapter 13 and chapter 7 bankruptcy each provides for different requirements and relief.  In general chapter 13 provides for an opportunity to reorganize your debt and chapter 7 provides for an opportunity to just discharge your debt.
Chapter 13 bankruptcy is often used by people with higher incomes and substantial non-exempt property to formulate a chapter 13 plan to reorganize their debt while under the protection of the bankruptcy court. Under a chapter 13 plan, you are able to reorganize your secured debt (such as mortgages and car loans) as wells as unsecured debt (credit cards and personal loans).  Often you are only required to back only  10% to 20% of you unsecured debt and discharge the rest. A typical chapter 13 plan is over a period of 3 to 5 years. 
Chapter 13 bankruptcy is also used by people who are behind with their mortgages and to save their homes from foreclosure. Under a chapter 13 plan, you are able to take various approaches. You may reinstate your mortgage by catching up-to-date your past due payments over a period of up to 5 years.  You may use the bankruptcy court's new loss mitigation mediation ("LMM") program to negotiate with your mortgage company to achieve a modification of your mortgage. Totally underwater second mortgages on residential property may be wholly avoided. Maintenance association liens may be avoided to the extent they are not secured by equity in the real estate.   

Chapter 7 bankruptcy is usually used by people with lower income and little non-exempt property. Under chapter 7 unsecured debt, such as credit cards and loans, is discharged, unless it falls within the categories of non-dischargeable debts, such as student loans and some types of taxes.

(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.

It’s easy to be confused when talking about the different types of bankruptcy. Most people are aware that bankruptcy is a way to eliminate debt. What they are not sure of, is whether it’s really in their best interest to file at all. There are some cases where it’s a tough decision. The person may+ Read MoreThe post There Are Different Types Of Bankruptcy appeared first on David M. Siegel.

If you file a Chapter 7 and you have a secured debt, often times a car note or a mortgage, you will be asked by the creditor to reaffirm that debt. What does that mean?  When a Chapter 7 debtor reaffirms a debt they agree to continue paying that obligation even after their bankruptcy case […]