One of the advantages of hiring a Utah Chapter 13 bankruptcy lawyer and filing for Chapter 13 bankruptcy is that creditors are required, by law, to halt any efforts on their part to repossess items or otherwise demand payments from the debtor. Furthermore, opting for Chapter 13 bankruptcy can, in certain circumstances, put a stop to or put a hold on foreclosure proceedings. Chapter 13 bankruptcy also gives homeowners the opportunity to repay their past due mortgage payments over a 3 or 5 year period through a court-ordered payment plan. In addition, if the debtor’s home has no equity (the first mortgage balance exceeds the current fair market value of the home), the debtor may have the ability to remove second mortgage in Chapter 13 bankruptcy proceeding (a lien strip). Removing a second mortgage is typically done through an adversarial proceeding in the bankruptcy court. If the homeowner is successful the proceeding, the court will order that the second mortgage be removed from the property. Upon removing the second mortgage, the debt will be treated like any other unsecured debt.
Generally through a Chapter 13 Bankruptcy, my clients often end up paying back less than they owe. While secured loans — loans that are guaranteed by the pledge of an asset such as a car or a house —must be paid back in full, unsecured loans, such as credit card debt, may be eligible for a significant reduction of the amount owed. Only through the bankruptcy court process can a debtor legally compel a creditor to accept a reduction in the total sum of the amount due. For that reason, it is especially useful to have a legal representative assist you with your filing so that you can maximize your chances for a beneficial outcome. In addition, all creditors must comply with the terms of the court-ordered Chapter 13 plan.
Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.