Chapter 13 and Foreclosure?

Question

I filed a Chapter 13 Bankruptcy last year and have been on time with my payments and now I'm facing foreclosure. When they do finally foreclose on my house and sell it for less than what is owed on it, what will happen with the remaining balance owed on the property?

Will my Chapter 13 payments go up and will I be responsible for the remaining balance on the property?

Answer 1

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time. Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.

Answer 2

depends on your state and/or the type of foreclosure (Judicial vs non-judicial). In California, you will get 1099ed for the loss (for the second loan) and if the lawyer cannot add the loss to the bankruptcy, your accountant can fight the 1099 because you are insolvent at the time of the foreclosure.

Regards

Answer 3

Talk to your bankruptcy trustee asap.

Answer 4

You need to talk to your attorney as soon as possible. He or she should be able to advise you.