Filing Bankruptcy For Past Due Mortgage Payments
Have you fallen behind on your mortgage? Learn how filing bankruptcy for past due mortgage payments can help you turn things around in this video by Jamestown bankruptcy lawyer Scott Humble.
I had a couple come in the other day, and they were so far behind on their mortgage payments, they really didn’t know what to do. This is the exact situation that a Chapter 13 was designed for back in the Great Depression. The original purpose of a Chapter 13 was to save houses when people are behind. It’s been extended to other things such as vehicles, and taxes, but the primary purpose was to save your house. We’re able to file the Chapter 13.
Bankruptcy is different than any other type of law. What you get in a lawsuit, let’s say, whether it’s criminal or civil, is called a remedy. The remedy is always at the end. For example, a friend of yours went through a divorce. They weren’t divorced until the end. Or a friend of yours had a speeding ticket. They didn’t get sentenced on a speeding ticket until the end. Bankruptcy is the reverse. You get your remedy as soon as we file the case electronically with the court, and we do that here every day. It’s under Section 362 of the bankruptcy code. Technically, it’s 11 USC 362, and it says that, as soon as we get a docket number for you, you are protected, and your assets are protected. Recently, I had a client come in from Pennsylvania, and they were very far behind on their mortgage payments. In fact, in Pennsylvania, instead of having a foreclosure sale by an attorney, the foreclosure sale is done by the county sheriff, and that foreclosure sale was going to be in ten days. They were losing their house. The bank was contacting them, saying, they had to be out of that house in ten days. They were freaking out, and I understand that.
They came in and we went through the process to say what we’re going to save the house. They signed the paperwork, and what I did is I filed an emergency Chapter 13. For an emergency bankruptcy, we we file only the very necessary documents so that we can get that docket number. That’s the key, getting the docket number from the court, because as soon as we have that, that protects the client and their assets. We call up the bank and fax them the information, showing that the docket number was filed, and we’ve got a Chapter 13 bankruptcy pending. I was in the parking lot at the grocery store, and the attorney for the bank called me up on my cell and said he just got our information on this particular client filing Chapter 13. He had already notified the bank and called the sheriff, and they were not going to be having that foreclosure sale. That’s really what’s real important with Chapter 13 and saving your house and being behind on a mortgage foreclosure.