Rise in New York foreclosures means many could benefit from bankruptcy

February 28, 2014 (Press-News.org) Rise in New York foreclosures means many could benefit from bankruptcy

Article provided by Michael A. Fakhoury, Esq., P.C.
Visit us at http://www.fakhourylaw.com

According to a report from the chief administrator of courts in New York, the number of foreclosurefilings in 2013 exceeded the totals for 2012 and 2011 combined. In some areas, the problem has been particularly pronounced.

A report from the Times Herald-Record indicated that foreclosure filings approximately doubled in Orange and Ulster counties from 2012 to 2013. RealtyTrac, a company that tracks foreclosures, reported a current total of around 76,000 foreclosed homes throughout the state, including approximately 4,000 in the Poughkeepsie area. Newburgh, Orange County, has approximately ten percent of its housing stock sitting completely vacant.

With the brutal winter that has been pummeling the Northeast and the accompanying high home heating bills, it is likely that home foreclosures in the area will not taper off in 2014. If you are one of the many homeowners in upstate New York who is facing foreclosure, you should be aware of how Chapter 13 bankruptcy can save you from losing your home.

Chapter 13 stops foreclosure and can allow you to catch up on mortgage payments

Chapter 13 bankruptcy is very different from Chapter 7 bankruptcy, which is the most common form of consumer bankruptcy and is what most people think of when they hear the term "bankruptcy." In a Chapter 7 case, nonexempt property is liquidated (sold) in order to partially repay creditors and most types of debt are almost immediately discharged.

Chapter 13 bankruptcy involves an entirely different process. Chapter 13 filers, with the help of a bankruptcy attorney, create a three to five year repayment plan which must be approved by the court. Under the terms of this plan, debts will be consolidated, and in many cases, payments will be lowered. At the end of the three to five year term, most types of remaining debt will be discharged completely, meaning a Chapter 13 filer will often pay just pennies on the dollar on unsecured debts.

Chapter 13 bankruptcy also allows for a unique opportunity to save your home from foreclosure. By filing for bankruptcy, a legal instrument known as an automatic stay goes into effect. An automatic stay temporarily halts all creditor collection actions, including foreclosure. With the foreclosure process stopped in its tracks, you can have time to factor your mortgage payments into your Chapter 13 plan. If you make up for past-due mortgage obligations under the plan and keep current on ongoing payments, you can defeat the foreclosure and keep your home.

If you are worried that you may not be able to keep up with your mortgage payments during your three to five year repayment term, keep in mind that with payments lowered on other types of debt, more of your income will be freed up to go toward your mortgage. In addition, a helpful feature of the Chapter 13 process is the possibility of a loss mitigation order, which serves to modify the terms of your mortgage in order to help you avoid a potential foreclosure action in the future.

Explore solutions to your foreclosure problem with a New York bankruptcy lawyer

If you are one of the many New York homeowners facing foreclosure, take action to save your home today. Get in touch with a New York bankruptcy attorney to learn more about what a Chapter 13 filing could do for you.