In a Chapter 13 bankruptcy, the foreclosure process will be permanently halted if the debtor wishes to retain the property and submits a reasonable plan that is approved by the trustee. To propose such a plan, the debtor must demonstrate the ability to sustain current mortgage payments and make additional payments to catch up on delinquent payments over the next three to five years. The debtor must therefore make two payments: the current mortgage payment and the agreed-upon Chapter 13 bankruptcy payment.
This may seem impossible at first glance, but in today's economy, it is frequently much simpler than one might expect. This is due to the fact that in the majority of Chapter 13 cases filed today, the second and third mortgages could be eliminated from the property. This procedure is known as lien stripping, and it can aid in the financing of Chapter 13 plans.
Bankruptcy is likely the most potent foreclosure instrument available in the United States. And in these difficult economic times, the query is not merely whether a bankruptcy filing can stop foreclosure, but rather, what else can the bankruptcy do for me besides stop the foreclosure? Using Chapter 13, it may be possible to attack the mortgage and eliminate all other liens on the property, as well as reduce or eliminate unsecured debts such as credit card and medical expenses. Similarly, if new cram down legislation is passed, arrears may no longer be an issue because the home loans will be restructured into a single mortgage with a reduced interest rate, a lower monthly payment, and a 40- to 50-year term.
Recent research indicates that the simpler it is to file for bankruptcy, the more people are willing to take risks and launch a new business. The actual cause of the increase in bankruptcies cited by the credit industry lobby to alter the bankruptcy law in 2005 was the expansion of credit by the same companies. Prior to the change in the law, the rate of filings per million dollars of consumer credit remained relatively constant, fluctuating by approximately 5% over roughly twenty years. The more unsecured debt they lend, the more individuals become bankrupt. The promised savings from reduced credit card interest rates have yet to materialize for the rest of us. Obviously, the bankruptcies that would have been most beneficial for the economy should have been those of the other recipients of bailouts. But this was not the case. The legislators have given our tax dollars to the bigwigs and have left the bankruptcy laws that aid the credit industry untouched.""
" - https://www.affordablecebu.com/
