When a Chapter 13 Bankruptcy Petition has been filed, all foreclosure and collection actions must immediately come to a halt. Chapter 13 Bankruptcy, otherwise known as “Reorganization Bankruptcy,” provides for homeowners who are in default due to missed payments to negotiate a repayment plan with their lenders. Once the parties have consented to a negotiated repayment plan and the Bankruptcy Court has approved it, the homeowners will be allowed to pay the missed payments off over a 3-5 year time period.
All mortgage debt reorganization payments must be made on time, and the homeowner must resume making their regular monthly mortgage payments as well. The homeowner will lose the protection that the bankruptcy process provides if any payments are skipped, and the lender will be allowed to resume collection / foreclosure actions.
Under California Law, lenders are entitled to begin moving for foreclosure sale within three months of recording a Notice of Default in the county where the property is located. Failure to take action in a timely manner could result in the loss of your home. Don’t wait until you receive notice that a foreclosure sale date has been set. Contact the Rancho Cucamonga Law Office of Bankruptcy Attorney Mark D. Edelbrock as soon as you are in danger of losing your home to foreclosure. Our office will take swift action to help you stop foreclosure and keep your home.