How Does Bankruptcy Affect My Mortgage in Queens?
What to expect after you file for bankruptcy
If you are considering bankruptcy, you are probably already experiencing pretty dire financial problems. If you have missed several mortgage payments, you are at risk of foreclosure on your home. Bankruptcy may be the most reasonable option to get a handle on your situation. When I meet with clients at Mark E. Cohen, Esq., I help them understand that bankruptcy is really not an end but a new beginning. I also draw from more than 25 years of experience to clearly explain bankruptcy and how it affects an existing mortgage.
Bankruptcy options and how they affect your mortgage
Whichever type of bankruptcy you pursue, your mortgage company cannot raise your interest rate or change the terms of your loan in response to filing for relief. But you need to be aware that filing for either Chapter 7 or Chapter 13 bankruptcy does affect your current mortgage. So you will need to know the difference between Chapter 7 and Chapter 13.
Chapter 7 bankruptcy
If you qualify for Chapter 7 and your home is deemed exempt, you can choose to continue making mortgage payments and keep your home. You still risk foreclosure, however, if you miss payments. And, unlike Chapter 13, Chapter 7 does not allow for a payment plan — you’ll need to catch up on missed payments, adding a significant burden to your current mortgage.
Chapter 13 bankruptcy
Under Chapter 13 bankruptcy, your liability to your lender remains in place. But you gain the advantage of establishing a repayment plan that lets you extend overdue payments over time (usually three to five years). Your mortgage payments, therefore, will be increased during the time period in which you are paying off your arrearage.
Other mortgage options offered through bankruptcy
Filing for bankruptcy may also allow for some loan modification options you would not otherwise be able to access. When exploring how Chapter 13 can stop foreclosure in Queens, a knowledgeable bankruptcy attorney helps you explore such options as:
- Reaffirming your mortgage
- Stripping off second or third mortgages on your home
- A “cram down” for mortgages other than those secured by your residence
- Discharging a deficiency balance
These are complicated concepts. But I am happy to explain them to you and help you work toward financial freedom through bankruptcy, no matter your circumstances or how much you owe.
To ease the stress of overwhelming debt, call our bankruptcy and real estate lawyer in Queens
All too often, good people find themselves in financial trouble that quickly spirals out of control. For more than 25 years, I have helped people like you understand the available options, make informed decisions and navigate through the complex process of filing for bankruptcy.
Located on Queens Boulevard in Forest Hills, I offer a wide range of services to individuals and families suffering from the weight of debt. Call Mark E. Cohen, Esq. at 718-487-9979 or contact me online to schedule a free consultation.