One of the reasons a person may choose Chapter 13 bankruptcy over Chapter 7 bankruptcy is because they want to keep their home. However, keeping your home is not a given. Read on to find out five things you must do if you want to ensure that you keep your home. If you have questions, or you are ready to file bankruptcy, reach out to an experienced bankruptcy attorney at The Law Offices of Paul Y. Lee for a free consultation by calling 951-755-1000.
- You must fully understand your Chapter 13 bankruptcy plan
- Thoroughly track payments
- Keep a close eye on your monthly statements
- Keep an eye on payment amounts
- Do not get behind on your property taxes
Chapter 13 generally requires that you keep making payments on your home while you are in bankruptcy. In most cases, you will need to make payments that come due after the filing and also catch up on missed payments via the bankruptcy payments made to your Trustee. However, this is not true in every case. Sometimes, you may be expected to make payments for your home directly to your lender. The fact that all cases are different is the reason you must fully understand your plan.
If there are any future disputes about payments, you want to have a record of what you have paid. Your payment history should be complete and retrievable. For example, if you pay via check then you should get a copy of the cancelled check. If you pay online, print out a receipt.
New federal requires now require that your loan servicer continues to send you a monthly mortgage statement. This statement should tell you what is happening to your loan and what is being paid off via your Chapter 13 bankruptcy. You will want to keep these statements and check them monthly to ensure they are consistent.
The monthly payment you make on your home loan could change during your bankruptcy. This may be due to changes in escrow amounts for insurance or taxes, you may have an adjustable rate mortgage, or there may be a time-limited interest-only feature. Your loan servicer is required to give you advance notice of any changes made and if there is a change, you will need to talk to your attorney about whether your Trustee will handle it or if it should be handled elsewhere.
Depending on your particular loan, your property taxes may be included in your mortgage. If they are not, then it essential that you stay current on your property taxes. If you do not, then you could end up losing your home to tax debt and your Chapter 13 bankruptcy could have been for nothing.
If you have questions about the process of filing bankruptcy then we urge you to contact The Law Offices of Paul Y. Lee at 951-755-1000 for a free consultation.
