Consumer Law

"Prepare to Pay Extra if You Fall Behind on Mortgage Payments While in Chapter 13"

By M. Stan Herring

The Bankruptcy Law Network has posted an article about what happens if you fall behind on mortgage payments while undergoing Chapter 13 bankruptcy. If payments become delinquent after filing for Chapter 13 "the lender?s recourse is to file a motion for relief from stay, which is a request that the judge lift bankruptcy protection to allow the lender to initiate foreclosure proceedings. "

There is a filing fee of $150 for relief and the lender's attorney will also charge a fee. However, mortgage companies are usually open to relief settlements because they know bankruptcy judges won't grant their motion if it appears that the homeowner can catch up on payments. Bankruptcy judges generally want those filing Chapter 13 to keep their homes. However, you will probably still have to pay various fees and "run the risk that the judge might order a less generous settlement or that the judge might grant the motion and all the foreclosure process to start."

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

The best solution to this problem is to avoid falling behind on mortgage payments, but if you have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

You can also join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

Full post as published by Alabama Consumer Blog on March 24, 2010 (boomark / email).