How Filing Chapter 13 Saved My Home
Unfortunately, too many people face losing their home because of a financial crisis. In many cases, like the one below, the debt problems occurred because of something that was out of the person’s control. John and Maryann came to my office last year after they received a foreclosure complaint. Please note that I have changed the names of my clients and some of the facts, but this is an example of how easily a person can face losing their home.
“My name is John. My wife, Maryann, and I were doing great. We both had fantastic jobs, a wonderful home, and two beautiful children. We were living the American dream. Sadly, that changed in a matter of seconds. I was on the way to work when I had a mild heart attack. I was in the hospital for over a week recuperating from open heart surgery. The months that followed were spent recovering from surgery and learning how to adjust to my new lifestyle.
Unfortunately, I was unable to work, so money was tight. Even though we had some savings and I drew some disability income, making ends meet was very difficult. We sold both vehicles to get rid of our car payments and replaced them with used vehicles. Maryann and I worked hard to cut back costs as much as possible, but we still fell behind on our bills. By the time I returned to work, we were thousands of dollars in debt.
Last week, we were served with foreclosure papers. Even though I am earning my full income again, we just don’t have enough money to catch up the mortgage payments in full and pay the attorney fees. We tried to work with our mortgage company and offered to pay extra each month until the payments were caught up, but they said no. We have no idea what we were going to do. We are scared. We want to keep our home, and we are willing to make payments if the bank would only work with us.”
Our Mortgage Company Didn’t Care
John explained that they let the credit card bills and other bills pile up as they tried to catch up their mortgage payments. They tried their best to work with the mortgage company to come up with some plan to catch up payments to keep their home, but they didn’t care. The people at the company were “sorry” and “hated to do it,” but they turned their account over to a foreclosure attorney.
According to John, “The day we received the foreclosure papers was a terrible day. What were we going to do? Where would our family live? If the mortgage company would just give us time, we could catch up our payments now that I was back at work. That is when we decided to turn to a bankruptcy attorney for help.”
Filing A Chapter 13 Bankruptcy Saved Our Home
John and Maryann never thought they would be the ones to file bankruptcy. They were very nervous and embarrassed to meet with a bankruptcy attorney, but they were thankful they took that step. I explained that filing a Chapter 13 case would stop the foreclosure and save their home.
I explained that when you file a bankruptcy, creditors have to stop all collection actions, including foreclosure actions. The creditor cannot proceed without court approval. In the Chapter 13 plan, they paid the past due mortgage payments in small monthly amounts while beginning their regular mortgage payments outside the plan. Filing a bankruptcy kept their home from being sold so that their kids didn’t lose the only place they knew as home.
But the Chapter 13 bankruptcy did more than just save their home; it got rid of all the credit card debt and medical bills that they could not pay. It also allowed them to get back on their feet and begin saving money again for their children’s college educations and their retirement. John said that “Filing a Chapter 13 case was the best decision we made for our family.”
Does This Story Sound Familiar?
If you are struggling to save your home, a Chapter 13 filing may be the right choice for you. However, each situation is different, and you need to consult an experienced New York bankruptcy attorney before you decide to file any chapter of bankruptcy. An attorney can evaluation your financial situation to determine your options and discuss the pros and cons of each of those options. Only then can you know what option is right for your family.
Call The Law Office of William W. Waldner at (212) 244-2882 to schedule a free consultation with a Manhattan bankruptcy lawyer. You may also ask questions or contact our office by suing our online contact form. Don’t let a financial crisis caused by an unexpected life event take away your ability to provide a home for yourself and your family.