Bankruptcy and Home Repossession

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A Bankruptcy can provide a number of benefits for your home. You should read the benefits listed below as they could be very helpful to you TODAY. Many people believe that by filing a bankruptcy they will automatically lose their home, but that is a myth. A bankruptcy attorney can describe which type of bankruptcy is best for you to protect your home and receive certain financial benefits.

Is Your Home Currently In Foreclosure Or Soon To Be?

St. Louis Home Foreclosure Help

If your home is about to be foreclosed upon or is currently in foreclosure, then filing a Chapter 13 bankruptcy can force the mortgage companies to stop foreclosure so long as the foreclosure sale date has not passed. It is important that you contact our office immediately because waiting until a day or two before the foreclosure sale date may be too late to gather the necessary documents we need to file your case. If your mortgage company is about to start foreclosure, then we can file a bankruptcy that will stop any mortgage companies from initiating foreclosure and adding substantial fees so long as we make arrangements to pay for the current mortgage payments and any amount that you are behind (usually under more favorable terms)—see below.

Changing The Terms Of Mortgage Arrears (Amount Behind On Your Mortgage)

Chapter 13 Home Benefits

If you file a Chapter 13 bankruptcy, your home cannot be taken from you, and you receive the benefit of paying your mortgage arrears (amount that you are past due on your mortgage to include interest and late fees up to the date of filing the bankruptcy) at a 0% interest rate, without any additional late fees added after the bankruptcy has been filed, over a 36 to 60 month time period. Effectively, this makes it more manageable to pay your normal monthly mortgage payments while you get caught up on past due mortgage payments a little at a time.

Strip Second Mortgages

Bankruptcy laws make it possible for a debtor in a Chapter 13 case to petition the Southern Illinois or Missouri bankruptcy courts to reclassify a second or third mortgage. “Stripping” a mortgage, as it’s commonly called, is a complicated process. An experienced bankruptcy attorney will be familiar with the process and the paperwork required to attempt to strip second and additional mortgages. Let’s say a debtor has a $150,000 first mortgage and a $30,000 second mortgage. If the home is appraised at an amount below the value of the first mortgage, the lender holding the second mortgage no longer has a secured debt. That’s increasingly the case because of the housing crisis and recession. The court can then reclassify that second mortgage as an unsecured debt, which is much more easily discharged in a personal bankruptcy.

Can You File Chapter 7 Bankruptcy And Still Keep Your Home?

Chapter 7 & Home Foreclosure

Yes, by meeting certain requirements and signing a reaffirmation agreement promising to continue paying the mortgage loan after the bankruptcy has been filed. Equally important to understand, you can choose to not keep (surrender) your home, or you can choose to keep one home and not another—speak to your bankruptcy attorney about these options.

Foreclosure and Chapter 7

Filing for Chapter 7 bankruptcy could have an impact on an impending foreclosure. When a bankruptcy attorney files a Chapter 7 petition it triggers the automatic stay. This can delay any actions by creditors for as much as three to four months. That’s enough time to try to negotiate some type of loan modification with the mortgage company. It’s important to understand the lender can file a motion to lift the stay, however. In many states, if the foreclosure notice was filed before the bankruptcy filing, a Chapter 7 filing will have little effect on the foreclosure time-frame. An experienced bankruptcy attorney will understand the impact of state laws on foreclosure and bankruptcy.


Important Disclaimer: The information discussed above and throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney. There are many intricate rules of law governing bankruptcy with many exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances. THEREFORE, it is important to discuss any information contained in this website with one of our attorneys before taking any action or refraining from taking any action.

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Coronavirus: Our Office And Your Safety

Our Offices In Illinois And Missouri: Our offices will continue to remain open to serve all our current
and future clients as we, as attorneys, have sworn an oath to uphold! A Bankruptcy Law Firm, LLC provides
legal and financial services in which Illinois and Missouri have deemed our law offices essential business
activities. Michael J. Benson is committed to ensuring each and every client is being responded to as
immediate as possible, please read below to help our law firm be more efficient so that we may help
EVERYONE with ALL your questions and concerns, especially during these uncertain times.

Precautions: Until the “Stay at Home” Orders have been lifted our offices are functioning 100%.
However, for the safety of you and our employees we are limiting in-office appointments to only those
appointments absolutely necessary, and we are timing appointments so that there will be only ONE client
in the office at any particular time. Therefore, we need your help, patience and understanding to achieve
this goal. We ask our clients to minimize their movements within our offices upon your arrival and to
refrain from using the restrooms at this time. Further, we are disinfecting the waiting area and the office
where your appointment will be held to the best of our ability in between each and every client.
Current Clients: At this time, we are conducting ALL appointments with current clients via telephone
or email communication. Michael J. Benson prefers to give personal attention to each and every client
and to meet his clients personally as much as possible throughout your entire case. However, safety
comes first during this pandemic, and therefore, we will not hold in-office appointments. Further, we
kindly ask clients to not arrive at the office unannounced as this may cause more than one client in the
office at a given time and jeopardize the safety of others—PLEASE respect the safety of others! In regards
to turning in required documentation for your case, please call the office to coordinate.
New Clients: We are still meeting with new clients who have bankruptcy questions now more than ever.
We will meet with you in person and our goal is that you will be the only client in the office at a given
time. If you believe you may have coronavirus symptoms, tested positive for coronavirus or if you are an
at-risk person, then please let our office know and we can schedule a phone consultation so that you can
still receive answers to your questions and concerns.
Phone Calls And Voicemails: Please understand that our office, like every business, is experiencing
an extraordinarily high volume of calls during this time. Again, our office is 100% committed to responding
to our clients as fast as humanly possible. WE NEED YOUR HELP – if you call the office, please leave a clear
voicemail with your name and best contact number and give a precise reason for your call. If you give us
an idea why you are calling, then you will get a quicker answer and it will enable us to be more efficient
so that we can answer more phone calls in the same amount of time so that we can give our clients the
best possible legal care!